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K.C.I.E., M.Inst.C.E. 

Lately Dewan of Mysore, 

Formerly Superintending Engineer and Sanitary Engineer to 

Government, Bombay. Sometime Special Consulting 

Engineer, Hyderabad State 





First Published 1920 


In view of the extensive changes which 
are now being made under the new Govern- 
ment of India Act, it is necessary to study 
Indian political, economic and social pro- 
blems in a new light. 

It is the spirit and intention of the Act 
to prepare the country for full responsible 
government, and it should certainly be the 
endeavour of the people to remove at 
once every stumbling block from their path 
and to take the most complete advantage 
of this new opportunity. 

The Indian mind needs to be familiarized 
with the principles of modern progress, 
a universal impulse for inquiry and enter- 
prise awakened, and earnest thinking and 
effort promoted. By these and other means 
a new type of Indian citizenship — pur- 


poseful, progressive, and self-respecting — 
should be created, and a self-reliant nation- 
hood developed. 

This book seeks to indicate, however 
imperfectly, the avenues towards recon- 
struction now open. It attempts, in a 
constructive spirit, to outline a scheme of 
true national life, and for the high task of 
achievement invites co-operation from all 

The author may claim some measure of 
administrative experience, as he has spent 
many years in the service of the British 
Government in India and in leading Indian 
States. He has, on several occasions, 
travelled outside India for the purpose of 
obtaining first-hand knowledge of world 
conditions and problems. 

The book has had to be written whilst 
away from home and under other diffi- 
culties. The author is indebted to several 
friends and assistants for material help in 
its preparation. 



10th October, 1920. 


chap. page 

Preface ...... v 

I The Indian Problem ... 1 

II India in Relation to Progressive 

Countries ..... 17 


III The Central Government . . 39 

IV Provincial Administration . . 57 

V Local Self-Go vernment . . .74 

VI Finance 95 


VII Economic Activities in Advanced 

Countries . . . . .117 

VIII Trade and Commerce . . .135 

IX Industries 153 

X Agriculture 173 

XI Development of Resources and 

Communications .... 196 





XII Betterment of Social Conditions . 221 

XIII Social Reform .... 236 

XIV Education 256 

XV Nation-Building .... 273 
XVI Organization . . . . .290 
XVII The Immediate Task . . .310 

Index 327 



The Great War subjected all countries to 
a severe test, revealed weaknesses in the 
political, social and industrial structure, 
previously unsuspected, and forced states- 
men to undertake reconstruction on a 
comprehensive scale. 

The first place in all programmes of 
reconstruction has necessarily been as- 
signed to the repair of ravages wrought by 
war and the conversion of war machinery 
to productive use. Next has come the 
strengthening of national defence. Then 
have followed measures for increasing pro- 
duction, especially of manufactures and 
shipping, and the extension of foreign 
commerce, particularly the export of manu- 
factured goods. Great emphasis has also 
been placed on the importance of extending 


education, and on the necessity of improving 
social conditions and raising the standard 
of living among the labouring classes. 

India, happily, has had no devastated 
cities to reconstruct, no ruined homesteads 
to restore, and no sunken ships to replace. 
Her problem of demobilization has been 
comparatively small. She has, however, 
incurred for the first time a heavy unpro- 
ductive debt, and has had to face the prob- 
lem of high prices and food scarcity. 

Reconstruction on an extensive scale is 
more urgently needed in India than in other 
countries, because political, social and eco- 
nomic developments have been insufficiently 
considered for many }^ears past, and because, 
in consequence of such neglect, the standard 
of living has reached a level far below the 
minimum recognized in civilized com- 
munities as necessary for decent existence. 

The Japanese Government fifty years ago 
undertook a comprehensive programme 
of reconstruction. The lead then given is 
still being vigorously followed. As a result, 
life in Japan to-day is one sustained effort 
toward self -improvement, and already the 


average standard of earning there is three 
to four times what it is in India. 

As a dependency, India has had no 
reconstruction programme. She is, there- 
fore, called upon now to begin much of 
the work which Japan has already success- 
fully accomplished. She has to rebuild 
a structure dilapidated by the neglect of 
ordinary repairs. 

One of the greatest deficiencies which 
India has to make up is her lack of facilities 
for securing education. To-day, three 
villages out of every four are without a 
school-house, and about 30,000,000 children 
of school-going age are growing up without 
any instruction. The officials have been 
so opposed to compulsory education that, 
until quite recently, they were disinclined 
even to permit municipalities willing to 
bear the cost to introduce such a system. 
No wonder that barely seven per cent, of the 
Indian population can read and write, 
whereas in progressive countries eighty to 
ninety per cent, of the population is literate. 

The universities are utterly inadequate 
in number for so large and populous a 


country, and fall far short of modern re- 
quirements in equipment. The provision 
for technical and commercial education is 
meagre in the extreme. 

Lack of liberality in this respect, and 
absence of official encouragement of indi- 
genous enterprises, have kept Indians from 
developing new and expanding old indus- 
tries and extending commerce. At the 
same time, the world competition has made 
it impossible for the indigenous industries 
to thrive. Indians have, therefore, been 
driven more and more to the land. 

Nearly three-fourths of the population is 
solely dependent upon agriculture, which, 
owing to poverty and lack of education, 
is still conducted with crude, old-fashioned 
methods and implements, and without 
any scientific attempt to renew the fer- 
tility of the exhausted soil. The yield per 
acre is small, and the farmer is able barely to 
eke out a miserable existence. In spite 
of these chronic conditions, no provision 
has been made to enable the rural popula- 
tion to find profitable work by developing 
agricultural or cottage industries. This 


is especially to be deplored, because farming 
operations in India occupy only six or 
seven months out of the year. 

The development of the natural resources 
of the country has been restricted because 
Indian directing energy has not been given 
free scope, and British direction available 
in India has been limited. Had Indians 
received support and encouragement from 
Government, they, with their old skill at 
handicrafts, might have produced manu- 
factured goods at a rate that would have 
made them formidable competitors in the 
modern industrial world. 

Substantial success in trade and com- 
merce is impossible to-day without large 
capital and combines. In the United King- 
dom, such combinations are encouraged 
and assisted by Government. In India, 
on the contrary, they are regarded as a 
menace to British trade and, therefore, to 
British supremacy, and discouraged. 

Industry is even penalized. Excise duty 
is, for instance, imposed upon cotton 
manufactures. Canada taxes all imported 
goods ; 15 per cent/on cotton goods from the 


United Kingdom and 22 to 23 per cent, on 
those from the United States. The duty 
is put on with the express intention of 
protecting the Canadian manufacturer from 
foreign competition. 

In India, on the other hand, not only are 
cotton goods imported practically free, but 
the government actually imposes an excise 
duty on the products of the local mills to 
enable the British manufactures to com- 
pete successfully with them. Nowhere else 
in the world would such an obvious attempt 
to handicap industry be tolerated. 

Indians engaged in trade and commerce 
in foreign countries have no financial or 
political backing, and foreign intercourse 
is discouraged. Shipping, as an industry, 
has practically died out. 

The cumulative effect of these policies 
upon the economic condition of the people 
has been most deplorable. An unskilled 
labourer in the United States or Canada 
earns more in a week than the Indian 
worker earns in a whole year. The 
estimated average wealth of the Indian 
population is less than one-twentieth of the 


corresponding average for the United King- 
dom, and about one-thirtieth of that for 
the United States. And yet the 325,000,000 
of Indians have not only to feed and clothe 
themselves, but also to support one of the 
costliest administrations in the world. 

The low output of production in India 
is mainly due to the fact that men and 
women are engaged in a lower order of 
occupations there than in other lands. 
The higher occupations are under non- 
Indian control. While careers are open 
to Britons at home and abroad, wherever 
they may choose to carry on their life 
work, Indians find the doors of oppor- 
tunity closed to them in their mother- 
land, and are not welcomed even as labourers 
in civilized countries. 

The present system of governance aims 
at preserving order rather than ensuring 
progress. Peace and security are main- 
tained, moreover, by autocratic methods, 
and the activities of the people are re- 
stricted and their national growth stunted 
in the process. Again and again, during 
recent years, antiquated regulations have 


been employed to deprive Indians of liberty 
without charge or trial, and, not satisfied 
with these drastic powers, the adminis- 
tration, during the last decade, has armed 
itself with legislation enabling it to inter- 
fere with freedom of press, speech and 
movement in a manner unknown in any 
civilized country. 

The people themselves are, as a rule, 
passive and unaggressive. They are 
guided rather by the opinion of the caste 
or community than by a common national 
standard of life, thought and work, by 
centuries-old traditions and superstitions 
rather than by the collective experience 
of the modern world. Foreign travel is 
interdicted. Through leaning on others, 
large numbers of people have become re- 
duced to social parasites. 

The existence in India of millions of per- 
sons of the depressed classes, whose very 
touch is considered pollution by the caste 
people, is to be condemned on humani- 
tarian as well as economic grounds. 

The backwardness of women's education, 
and the restriction of their employment to 


domestic duties and, among the agricul- 
tural classes, to casual field work, without 
their being given any recognized status 
or reward, is also holding back the country. 
It is inevitable that where such a large 
proportion of the population is kept unem- 
ployed or partially employed, or engaged 
in inferior poorly paid occupations, the 
per capita production should be very small, 
and the efficiency and prosperity of the 
nation, as a whole, very low. 

The social customs of India promote a 
fairly rapid growth of population. Early 
marriage is the rule, and children are 
born into a world in which no provision 
has been made for their maintenance. 
In a country like Norway, where people 
marry at about 25, the rate of increase 
of population is slow, and it is, there- 
fore, possible to maintain a high 
standard of living. India has still to 
learn that it is better to have a small, 
well-trained, prosperous population, than 
to have millions of half-starved, inefficient 
people retarding the progress of the country 
by their dead-weight. 


Hope is to be derived, however, from the 
fact that India possesses potential energy 
of unparalleled magnitude. Her greatest 
asset is the inherent intelligence of the 
people. Though relatively to the total 
population the percentage of illiteracy is 
appallingly large, yet the aggregate volume 
of literacy compares very favourably with 
that to be found in European countries, 
not excepting the United Kingdom itself. 
As many, or more, children are attending 
educational institutions in India as in the 
United Kingdom. There are more under- 
graduates in the eight Indian universities 
than there are in all the universities of the 
United Kingdom. 

Under favourable conditions, with stead- 
fast perseverance in a settled national 
policy, and by the introduction of science, 
modern machinery, and up-to-date business 
methods, the production of the country 
from agriculture and manufactures could 
easily be doubled within the next ten and 
trebled in fifteen years. Foreign trade 
could likewise be doubled in a similar 
period. In less than fifteen years the high 


percentage of illiteracy could be reduced 
to a fraction of what it is at present. 

The constitutional reforms, sanctioned 
under the Government of India Act, of 
December, 1919, will, if worked in the spirit 
in which they were conceived by the 
British statesmen responsible for them, 
greatly increase India's opportunities. 
That such reforms were given so important 
a place in the British programme of re- 
construction, demonstrates Britain's good- 
will towards India. That a reasoned com- 
prehensive scheme of this magnitude was 
matured, in spite of persistent opposition, 
and placed upon the Statute Book in times 
of great political unrest, is a tribute to the 
genius and earnestness of its sponsors. 
But for Mr. Montagu's perseverance and 
breadth of view, the reforms might have 
meant merely increased popular representa- 
tion in the legislative councils, the people 
being left to fight the bureaucracy in order 
to obtain, one by one, the internal reforms 
they desired. The scheme has defects. Its 
scope might have been wider ; but it is well- 
intentioned, and so far as it goes, complete. 


It must be remembered that the people's 
standards are higher to-day than they 
have ever been in the history of Indo- 
British relations. In order to create con- 
ditions favourable to progress, there must 
be a radical change in the system of Im- 
perial control over Indian affairs, and in 
the official attitude towards the people's 
aspirations and Indian problems generally. 

The reforms scheme will doubtless give 
the people a substantial voice in local 
affairs, but that, in itself, will not be 

The public activities of the country have 
hitherto yielded scanty results, because 
they have not had a reasoned scheme of 
national life behind them. State policies, 
to be successful, must have for their sole 
aim the good of the people, and must be 
precise and adapted to their understanding, 
tastes and means. 

There should, moreover, be an effective 
organization, independent of Government, 
to survey and catalogue the problems and 
needs of the nation, and to refer such 
problems to all classes of society for study, 


with a view to benefiting the country as a 
whole. This would create in the people 
the power of joint thought and joint 
action, and stimulate the growth of mass 
consciousness, the truest tests of a nation's 

It will be necessary to study world condi- 
tions as well as local conditions in order to 
discover the weak points in the Indian 
system. The deficiencies must, then, be 
catalogued and plans formulated. This 
book is an attempt, though a very imperfect 
one, in this direction. 

Next, a favourable atmosphere must be 
create^ It is hoped that the constitu- 
tional reforms will help to do this. 

Thirdly, the leaders must carry on press 
and platform propaganda to stimulate the 
people. The masses must be made to 
understand India's position relative to 
modern conditions. They must be shown 
how the work that lies before the country 
is to be performed. Differences between 
the various communities or races, and 
between castes and creeds permanently 
residing in the country, must be sympa- 


thetically adjusted, and where possible, 
eliminated. The people must be taught 
to associate in their daily work for a 
common object and with common aspira- 
tions. They must realize that anything 
they may do to help each other will be 
a service to the motherland. Above all, 
the country as a whole must join in con 
structive effort with the rest of mankind. 
If, as suggested in this book, the utiliza- 
tion of India's man power and material 
resources is placed in the forefront of 
national aims, if the people's general and 
technical knowledge is developed, if private 
initiative is stimulated, if all the latest 
inventions and discoveries are applied to 
increase production, if foreign experience 
is adapted to Indian conditions and fully 
utilized and useful foreign institutions 
readily adopted, if in short, all the improve- 
ments necessary and possible are intro- 
duced, the development of India, poli- 
tically, economically and socially, will 
proceed at a pace which may be one of 
the outstanding features of the coming 


The immediate future will put all persons 
and institutions to a severe test. The 
forethought and vigour with which Indians 
apply themselves to their new task, their 
capacity for joint action, their ability to 
maintain harmonious relations between all 
races and communities, and the co-opera- 
tion which they will be able to secure 
between themselves and Government agen- 
cies, will determine the pace of their 

If the British cordially help the Indians to 
build up their industry and trade, the re- 
sulting effect on India's prosperity will be 
immense, while the volume of benefit, 
even to Great Britain, will be far greater 
than it is at present. Such help will 
bind the two countries together by the 
strongest of links, namely, common 

British business interests and trade will 
assuredly not suffer in the long run. With 
increase of production, there will be gain 
all round — to the producer, to the manu- 
facturer, to the middleman and merchant, to 
every one who takes part in building up 


the country's prosperity. With such 
growth, although British interests may, as 
time goes on, seem smaller relatively to 
Indian interests, there is no reason why 
they should not increase in actual volume, 
as has been the case in Canada. There is 
room for both Britain and India in the 
great reconstruction work that lies before 
the country. Both will benefit, if the 
exclusive or partisan spirit is replaced by 
sympathy and active co-operation. 



Before attempting to prepare a programme 
of reconstruction for India, it is necessary 
to consider her economic and social condi- 
tions, in relation to those of progressive 
nations, to discover where and why she 
lags behind. It will not be sufficient 
merely to compare her present achieve- 
ment with her own past record. The 
results of such a survey may be hurtful to 
Indian pride, but if India aspires to. occupy 
a dignified position in the comity of nations, 
she must face facts. 

One has but to glance at vital statistics 
to realize the gravity of the situation. 
According to the census of 1911, the popu- 
lation of British India was 244,267,542, 

and of the Indian States 70,888,854 ; or 

17 c 


a total of 315,156,396 for the whole Indian 
Empire. Accurate revised figures will not 
be available until after the census has been 
taken in 1921 ; but it is probably safe 
to estimate that the actual present popula- 
tion of India is 325,000,000. 

In 1911 the population was spread over 
an area of 1,093,074 square miles of British 
territory and 709,583 square miles of Indian 
States, representing a total area of 1,802,657 
square miles. Thus there was an average 
of 175 persons to the square mile for the 
whole of India. The density of popula- 
tion in British India proper was 223 and 
in the Indian States 100 persons to the 
square mile. The corresponding figures 
for the United Kingdom were 374, for 
Japan 356, and for the United States of 
America 31. 

Although the average density of popula- 
tion is only 175 persons to the square 
mile for the whole country, there are 
districts in the Madras Presidency where the 
density goes up to 1,488. There are dis- 
tricts in Bengal with a maximum density 
of 1,163 persons and in Bihar and the 


United Provinces of 882 persons to the 
square mile. 

The United States, with a population of 
91,972,266 persons, stands, among pro- 
gressive countries, next to British India, 
with her population of 244,267,542. But 
while America has large resources of sur- 
plus arable land, in India all soil fit for 
profitable cultivation has long ago come 
under tillage. Usually the resources in such 
areas are taxed to the uttermost, and since 
at least three-fourths of the population 
are dependent on agriculture, even the 
partial failure of a single monsoon is often 
attended by widespread disaster. This is 
one explanation of the comparatively high 
death-rate and the low average duration 
of life in the country. 

The average death-rate for all India for 
the past ten years has been 31-8 per thou- 
sand. The corresponding recorded death- 
rate in other countries is 21-9 in Japan, 
15-12 in Canada, 14-6 in the United King- 
dom, 140 in the United States of America 
and 10-5 in Australia. 

The average life of an Indian is estimated 


at 23 years, as compared with 45 to 55 in 
Western countries. Climatic influences are 
not to be disregarded, but in the main this 
is undoubtedly due to the low standard of 
living in India, and the lack of healthy and 
orderly growth of the population. 

The average birth-rate in India for the 
past ten years has been 38-2 per thousand. 
The figure for Japan is 34-2, for the United 
States 31-3, for Canada 27-8, for Australia 
27-7, and for the United Kingdom 21-1. 

Religio-social practices make for early 
marriage, and as a result the average birth- 
rate is so high that, in spite of the appalling 
death-rate, the population is increasing 
rapidly, approximately at a rate of five per 
thousand per annum. This may not prove 
an unmixed blessing, if new industries are 
not introduced and new careers provided 
in the country, or an outlet found for the 
surplus population outside India. 

Of the 315 million people inhabiting 
India, including the Indian States, only 
18,500,000 persons (16,900,000 men and 
1,600,000 women) were returned as literate 


in the census of 1911. This means that 
only one out of every seventeen persons 
or 5-8 per cent, of the population are able 
to read and write. This was the state of 
affairs nine years ago. The percentage 
is perhaps slightly higher now, but it is 
deplorably low as compared with other 
advanced countries. The corresponding 
percentage of literacy is 95 in Japan, 94 in 
the United Kingdom, and 90 in the United 

The number of existing schools for ele- 
mentary education in British India is 
142,203 and the number of pupils attend- 
ing them is 5,818,730, of whom 5,188,411 
are boys and 630,319 are girls. Taking 
all classes of educational institutions to- 
gether, there is, in British India, one insti- 
tution for every 1,717 persons of the 

The school-going population in advanced 
countries varies from 15 to 20 per cent, 
or more of the entire population. Taking 
15 per cent, only as a basis for calculation, 
the population of school age in India may 
be reckoned at 18,731,054 boys and 


17,909,077 girls. The number actually 
attending the schools is 6,621,527 boys 
and 1,230,419 girls. That is, one boy 
out of every three and one girl out of every 
fifteen fit to be at school are actually 
attending educational institutions. The ex- 
penditure on education in British India 
from all sources, including fees, in 1916-17 
was 11-2 crores of rupees, 1 giving a rate of 
Rs. 14-4 per head of school-going popula- 
tion or 7 annas per head of the entire 
population. The corresponding expendi- 
ture in other countries was Rs. 38 per 
head in the United Kingdom, Rs. 104 in 
Canada, Rs. 13 in Japan and Rs. 114 in the 
United States of America. 

The provision for technical and commer- 
cial education in India is pitifully meagre. 
The students receiving technical and indus- 
trial education throughout all India num- 
bered only 16,594 in 1917-18. 

The statistics quoted show that the 
education of girls is neglected even more 
than that of boys, and that technical 

1 A note on the Indian currency and rates of ex- 
change will be found on page 95. 


education is practically non-existent. 
Most of the technical and commercial work 
of the indigenous population is being per- 
formed in an indifferent manner by persons 
who have learnt their trade by practice or 
who have obtained only home training of 
a rudimentary character. The Govern- 
ment and public effort in this direction 
has been negligible. It may be stated 
with truth that no serious attempt has been 
made to educate or to equip the nation for 
an industrial and commercial career, to 
enable it to earn a decent living and to hold 
its own amongst civilized nations. 

The number of newspapers and periodi- 
cals published in India in 1917-18 was 
3,978, which works out at about twelve per 
million of the population. The correspond- 
ing number per million persons in the 
United States was 225, in the United 
Kingdom 190, and in Japan 50. 

There is a vast amount of Press activity 
in countries like the United States. It is 
recorded that the circulation of periodi- 
cals of all classes in that country, including 
dailies, reached, in 1914, the enormous 


figure of 205,000,000. Many of the dailies 
are made up of about 24 pages, imperial, 
the Sunday editions running to 100 pages 
or more. 

The Press is a great educative force in all 
advanced countries, notably in America 
and the United Kingdom. In parts of the 
former country, the Press has taken upon 
itself the task of stopping corrupt practices 
and keeping the officials up to the mark 
in the proper discharge of their duties. 

The indigenous Press of India is a poorly 
equipped and persecuted agency. We have 
Press Acts and Press control in varying 
degrees of rigidity both in British India 
and the Indian States, and the Press as a 
whole has no enthusiastic support in poli- 
tically influential circles in any part of the 

Except for a small expenditure annually 
incurred for purposes of coast defence, 
there is no Indian Navy to speak of. For 
decades, India has been entirely dependent 
for protection upon the British Navy : 
and this policy has not been revised even 


when other units of the Empire have been 
permitted to have their own navies. The 
depredations wrought, without any chal- 
lenge, by the Emden in Madras, during 
the early period of the War, emphasized 
the necessity of creating an Indian 

In normal times, the Indian Army con- 
sists of about 70,000 British and 140,000 
Indian troops, the latter officered entirely 
by Englishmen, making a total peace 
strength of about 210,000 of all arms. 

Of the total British forces engaged in the 
recent Great War, the United Kingdom gave 
75 per cent., all the overseas dominions 
together 12 per cent, and India 13 per 

During the War, the Government of 
India recruited, on a voluntary basis, over 
600,000 combatants, and more than 400,000 
non-combatants. Including the contribu- 
tion made from the standing armjr India, 
therefore, in round figures sent on foreign 
service 1,300,000 men. 

The annual military expenditure in India 
was £21,000,000 before the War, and has 



recently risen to the high figure of over 

The corresponding expenditure on de- 
fence in some of the other countries for 
1913-14 is shown below : — 

millions £. 

millions £. 

United States 
United Kingdom . 
Japan .... 




Although only a dependency and sur- 
rounded on three sides by the sea, and on 
the fourth by an almost impassable moun- 
tain wall, India spends on defence in normal 
times more than twice the amount required 
to maintain the Empire of Japan. 

The number of post offices in India in 
1917-18 was 19,410. Ten years previously 
(i.e. in 1907-8) there were 17,777 offices. 
Considering the vastness of the country, 
neither the present number nor the latest 
recorded decennial growth can be said to 
be adequate. The number of letters, news- 
papers, parcels, etc., conveyed by post 


offices in 1917-18 aggregated 1,147,922,768, 
giving a rate of 3-6 articles for every 
individual inhabitant. The corresponding 
rates in other countries were 147 in Aus- 
tralia, 123 in the United Kingdom, 136 in 
the United States and 34 in Japan. 

The number of telegraphic messages 
conveyed in India during 1917-18 was 
19,897,787 or 6-3 for every 100 inhabitants. 
The corresponding rate in the United 
Kingdom was 198, in Canada 154, and 
in Japan 73. 

The telephone has come very largely 
into dailv use for business in all advanced 
countries. According to the latest statis- 
tics available, the number of telephone 
instruments in use for every 10,000 inhabi- 
tants was 1,850 in Chicago, 1,170 in New 
York, 800 in Montreal, 480 in Sydney, 
390 in London, 200 in Tokyo, and only 
4 in Bombay and 3 in Calcutta. 

Production may be considered under 
two heads, namely, agriculture and indus- 
tries, the latter including mining, fisheries, 
etc. Under agriculture, British India has 
a cultivated area (including double cropped 


land) of 265,000,000 acres, of which nearly 
47,000,000 acres are irrigated. 

Taking good and bad years together, the 
value per acre of irrigated crops, in normal 
times, may be put down at Rs. 50 per 
acre and of dry crops at Rs. 1 5 per acre. The 
total agricultural production before the 
War was valued at about Rs. 562 crores 
or £375,000,000. The estimates of pro- 
duction under agriculture for other ad- 
vanced countries are : The United States, 
£4,277,000,000 ; Japan, £300,000,000 ; 
Canada, £247,000,000 ; the United Kingdom, 
£239,000,000, and Australia, £73,000,000. 

The statistical information available re- 
garding Indian industries is very inade- 
quate, although accurate information in 
this respect is especially necessary in the 
case of a country so industrially backward 
as India. Basing the estimate upon a 
knowledge of what is going on in the Pro- 
vinces, the production from industries 
may be reckoned at about one-fifth of 
that from agriculture. 

The total production of British India, 
excluding the value of live-stock, minerals, 


fisheries, etc., may roughly be estimated at 
£450,000,000, and the total, including all 
these sources, will probably not exceed 
£600,000,000. This gives a rate of produc- 
tion valued at about Rs. 36 per head of the 

These figures are in the nature of a guess 
and presumably tentative. In view of the 
poverty of the people, it is important 
that a more correct balance-sheet of their 
resources be maintained, so that both the 
Government and the people may keep the 
figures in mind and endeavour to improve 
conditions from year to year. 

The per capita production in the United 
States and Canada is £40-6 and £29-5 
respectively under agriculture and £46-0 
and £72- 1 under industries. There is no 
reason why corresponding figures should 
not be available for India, but, as a matter 
of fact, they are not. 

In India, the production under factory 
industries is very small compared with 
that under agriculture, and insignificant 
in comparison with other leading manu- 
facturing countries. 


The value of imports, both merchandise 
and treasure, into British India amounted 
to £109,570,000, and of exports from the 
country to £163,263,000 during 1917-18. 
The total sea-borne trade was £272,833,000. 
This gives a rate of £1-1 per head of 
population, without making allowance for 
the population of the Indian States. If 
that allowance be made, the rate works 
out to £0-9 per head. The corresponding 
figures for other countries are : £62-6 in 
Canada, £40-0 in the United King- 
dom, £37-2 in Australia, £17-0 in the 
United States, and £6-4 in Japan. 

India exports raw materials and food 
products, while she imports chiefly manu- 
factured goods. She has lost the power of 
producing the manufactures required for 
her own use, and is obliged to pay for her 
imports by growing more raw products. 
If she were to manufacture for her own 
wants, using her abundant raw materials 
and the millions of people at present 
insufficiently employed, she could not only 
produce all she required, but also export 
manufactured goods for profit. By so 


doing she could save much of the money 
she now pays for her imports, and could 
amass additional wealth by exporting manu- 
factured goods. By reducing the pressure 
on the land the per capita production in 
agriculture will also be increased. 

India has, for every million of her popula- 
tion, 115 miles of railway. The corre- 
sponding figures for other countries are : 
Australia, 4,955 ; Canada, 4,825 ; the 
United States, 2,533, and the United 
Kingdom, 515. 

The tonnage entered into and cleared 
from British Indian ports in 1908, 1913 and 
1918 was 12-9, 17-3 and 10-9 million respec- 

The old shipping industry has gradually 
died out, and the construction of new 
shipping is not encouraged. There are 
practically no large ships owned by Indians, 
and the coastal shipping registered at 
the Indian ports during 1917-18 was only 
16,872 tons. On the other hand, the 
Government of Canada has been encourag- 
ing national shipping and foreign trade, 
with the result that her people now own 


roughly 1,000,000 tons of shipping, and her 
foreign trade has overtaken and exceeded 
that of India. 

In the United Kingdom, the United 
States, Canada and Japan, special atten- 
tion is at present devoted to the construc- 
tion of shipping as an urgent after-war 
measure. No such move is visible in India, 
nor, under present political conditions and 
policy, does it seem possible. 

The total gross revenue of British 
India, including the Provinces, in 
1917-18 amounted to £109,000,000. The 
net revenue amounted to a little over 
£80,000,000. Of this, the revenue from 
land was £21,000,000. This net revenue 
gives a rate of £0-34 for British India, per 
head of population. The corresponding 
figures for other countries are : The 
United Kingdom, £19-3 ; the United States, 
£7-9 ; Australia, £7-5 ; Canada, £6-45, and 
Japan, £1-5. These figures for revenue 
do not represent the same type of taxation 
*n all these countries, and the comparison, 
therefore, gives only a rough indication 
of the real state of affairs. 


Three presidency and eighty-eight joint- 
stock banks have then head offices in India. 
In addition to these, ten exchange banks 
do business in India, but have their head- 
quarters outside that country. 

There were 359 banks and branch banks 
in India in 1917. The corresponding 
figures for other countries were : The 
United States, 28,913 ; the United King- 
dom (1918) 9,357; Japan (1916), 5,874, 
and Canada, 3,327. 

The capital of indigenous Indian banks 
was £5,000,000. The British and foreign 
exchange banks had a capital of £18,000,000, 
making a total of £23,000,000. The cor- 
responding figures (in million £) for the 
United States were 482 ; the United King- 
dom, 88 ; Japan, 67 ; and Canada, 23. 

The deposits (in million £) in Indian 
banks amounted to 118, those in the 
United States of America to 5,767, in the 
United Kingdom to 2,355, in Japan to 
494, and in Canada to 324. 

The position of India in the banking 
world " illustrates how trade follows the 
bank as much as the flag. The compara- 


tively few branch banks and small deposits 
are striking in the case of India." * 

At a rough estimate, the entire assets of 
India, including the value of land, build- 
ings, furniture, gold, silver, live-stock, 
factories and other property, amounted 
to £3,500,000,000 before the War. This, 
distributed among the population of British 
India, works out to about £14 per head. 
The corresponding figures for other coun- 
tries were: The United States, £391 ; 
the United Kingdom, £320 ; Australia, 
£262 ; Canada, £259 ; and Japan, £52. 

The estimated annual income of British- 
India was, as already stated, £600,000,000, 
and the average income of an Indian was 
Rs. 36. On account of the high world-prices 
it may, perhaps, at the present time have 
risen to Rs. 45. 

The Postal Savings Bank deposits in 
India amounted to Rs. 1,659 lakhs (£110-6 
million) in 1916-17. This works out at 
Rs. 0-6 or annas 10-7 per head of popula- 
tion. The corresponding figures for other 
countries are : The United Kingdom. Rs. 

1 Indian Finance and Banking, by G. Findlay Shin-as. 


77-3 ; Canada, Rs. 14-85 ; the United 
States, Rs. 3-78, and Japan, Rs. 8-4. 

Both here and in subsequent chapters 
special reference is made to conditions in 
Canada and Japan ; Canada because that 
Dominion will in the nature of things be 
India's future model, and Japan because it 
is an Asiatic country which has adopted 
European civilization. 

The figures given in this chapter have 
been taken from the most reliable sources 
available, but they do not in all cases 
represent the same group of conditions or 
transactions, and in a few instances they 
do not even pertain to the same year. 
The information could not be made more 
specific without elaborate explanations and 
qualifications, but it is hoped that, even 
so, they do indicate a rough comparison 
of existing conditions in India, relative 
to the countries quoted. 

Political and Administrative 



The Government of India Act, passed in 
December, 1919, leaves no portion of the 
administrative structure unaltered, though 
the changes made in some parts are much 
greater than in others. 

In the sphere of local government, for 
instance, the principle of governance has 
been radically altered. Local bodies are 
no longer to be kept in leading strings, 
but are to be self-governing. 

The Provincial Government has been 
divided into two parts ; one part is to remain 
outside legislative control, while the other 
is to be placed upon a constitutional basis. 

While the Central Government is to 
remain uncontrolled by the legislature, and 
is not to be federalized, it will have to 
submit to greater criticism from popular 



representatives. In matters in which it 
may be in agreement with its legislature, 
it is, as a rule, to be free from intervention 
by the Secretary of State. The provincial 
authorities will also be generally free from 
intervention from above in matters in 
which the executive and legislative organs 
are in agreement. 

The position of the Secretary of State 
is to be altered by the establishment of 
similar conventions. He is further to be 
relieved of responsibility for purchasing 
stores and in allied matters, such responsi- 
bility being transferred to a High Com- 
missioner appointed by and responsible to 
the Government of India. 

The writer proposes, in this chapter, to 
examine in detail the changes effected in 
the administration of national affairs, and 
in the next three chapters to deal with 
those pertaining to provincial and local 
government and finance. 

The decision of the Joint Select Com- 
mittee that " India is not yet ripe for a 
true federal system," is to be deplored for 
two reasons, namely : — 


(1) Not until the Government of India 

has been federalized on the Cana- 
dian or Australian basis, that is to 
say, not until the functions of the 
Central Government are limited to 
the administration of national 
affairs and its intervention in 
provincial affairs reduced to the 
lowest possible minimum, can there 
be anything like full provincial 

(2) As realized by the authors of the 

Joint Report " a federal system 
would have made it easier for the 
Indian States, while retaining the 
autonomy which they cherish in 
material matters, to enter into 
closer association with the Central 
The Act does not provide at all for the 
representation of Indian States in the 
Indian Legislature. That is an important 
omission, for those States will continue to 
lack, as hitherto, the opportunity of in- 
fluencing the course of action in regard to 
(1) the disposal of public funds to which 


they indirectly contribute and which are 
appreciable, and (2) the administration of 
affairs which concern them jointly with 
British India. 

" The Princes' Chamber " is designed 
merely to deal with large questions affect- 
ing the States. At best, such a council 
is an anachronism. The system of repre- 
sentation provided for shows that the 
British Government assumes that the 
Rulers represent the interests of their 
States. Many among them, no doubt, 
seek to promote the well-being of their 
subjects, but however progressive they may 
be individually, not all of them can be 
expected to surrender their autocratic 
powers or to discuss and deal with interests, 
policy and measures on terms of equality 
with the expert officials of the Government 
of India. 

The Indian States will have to adopt 
constitutional government on the model 
of the reconstituted provincial administra- 
tion if they are not to lag behind British 
India. For economic and social better- 
ment, it is imperative that the people 


should be given the power to think and 
act in their own interests, the rulers gradu- 
ally assuming the role of constitutional 
Sovereigns. The larger among the States 
will eventually need two chambers — a 
popular legislative council and a senate, 
in the latter of which due weight will, no 
doubt, be given to birth, property, educa- 
tion and experience. 

Internal reform cannot, however, suffice. 
The affairs of Indian States are inextricably 
mingled with those of British India. Only 
by the creation of a federal system in which 
the Indian States are given a voice adequate 
to protect their interests and they, as well 
as the provinces, possess full autonom}^, 
can the Indian problem be satisfactorily 

The three great self-governing Dominions 
have federal constitutions. The introduc- 
tion of responsible government in India 
will not be complete until the Indian pro- 
vinces are independent of the Central 
Government in local affairs, as is the case 
in Canada. Since the Dominion or the 
federal system of government is the 


accepted model, although it is to be reached 
by stages, the Government of India will 
be expected to place that ideal before the 
various departments of the administration 
and the public, and to make preparations 
to that end according to a regular pro- 

The Government of India, as reconsti- 
tuted, will consist of the Governor- General 
and an Executive Council. The number 
of members to constitute the Council is 
not statutorily limited. Three members 
of that Council will continue to be public 
servants or ex-public servants who have 
had not less than ten years' experience in 
the service of the Crown in India. The 
law member will have definite legal quali- 
fications, but in future he may have gained 
those qualifications in India, and not, as 
hitherto, necessarily in the United Kingdom. 

Not less than three members of the 
Council will be Indians. The Joint Select 
Committee took care to point out ' that 
the members of the Council drawn from 
the ranks of the public servants will, as 
time goes on, be more and more likely to 


be of Indian rather than of European 

It is to be hoped that these recommen- 
dations will be carried out in a liberal 
spirit. Rapid Indianization of the per- 
sonnel of the Central Government is neces- 
sary to ensure the administration of affairs 
in consonance with Indian ideals and 
wishes. That, moreover, is the onty man- 
ner in which Indians will ever become fit 
for self-government. It hardly needs to 
be added that only competent men should 
be appointed. If sufficient trouble is taken 
to select for each post the right man, and 
one acceptable to the Legislative Assembly, 
it will be found that there is no lack of good 
material in the country. 

It is further to be hoped that the removal 
of the statutory limit will be utilized to 
increase the number of members of the 
executive councils. Canada, though con- 
taining a population only a fraction of that of 
India, and enjoying a smaller revenue, has 
more than twice as many ministers as India 
is to have, without reckoning the special 
ministries created during the War. 


The Government of India, as thus recon- 
stituted, will deal with matters affecting 
the defence of India — army, navy and air 
force ; railways, shipping, posts, telephones 
and telegraphs ; customs (including cotton 
excise) ; income-tax, banking, insurance, 
public debt ; civil and criminal law ; 
science, inventions, national and foreign 
trade and commerce. It seems a pity 
that civil law and the control of industry 
have not been left entirely in the hands 
of the provincial administrations. 

The Indian Legislature as reconstituted 
will be bicameral, consisting of : — 

(1) A Legislative Assembly comprising 

144 representatives, of whom 103 
are to be elected and 41 nominated, 
including 26 official members ; and 

(2) A Council of State, something in 

the nature of a senate, with 60 
members, of whom 33 are to be 
elected and 27 nominated, includ- 
ing not more than 20 official 
Since communal electorates have been 
constituted, it is to be feared that in some 


cases persons of proved political sagacity 
and trained in dealing with public questions 
may not find admission, and that important 
interests may be ignored. The present 
arrangement has to continue for some time, 
but, as suggested by the Joint Committee, 
it is to be hoped that the principle of pro- 
portional representation will eventually 
be adopted. 

The electorate for the Legislative 
Assembly comprises 687,100 votes for 
general seats, 206,640 for Moslem seats, 
and 15,000 for Sikhs, a total of 908,740 

The electorate for the Council of State 
is on a more restricted franchise, and the 
constituencies will only include 2,000 to 
3,000 voters each. The total electorate 
for the Council of State may, therefore, 
be 70,000 to 80,000 voters. 

The Presidents, at first appointed by the 
Crown, will, after four years, be elected by 
the Chambers themselves. 

The Legislature is not to be a sovereign 
body. The members may criticize, but 
cannot control. The watch-dogs may bark, 


but they cannot bite. The executive is to 
be permitted to retain its autocratic powers 
until Parliament considers that the Legis- 
lative Assembly can be vested with further 
authorit}^ which should be, at the outside, 
ten years from now. 

The Indian Budget will be submitted to 
the Legislature, which will be free to vote 
upon it, excepting certain reserved charges, 
such as interest and sinking-fund on loans, 
salaries and pensions and national defence. 

The Governor -General-in-Council has 
power to sanction any expenditure that 
may be refused by the Legislature, if, in 
his opinion, it be necessary or urgent. 
The Act, however, provides that every such 
case shall be submitted to Parliament, and 
that, before being presented for the Royal 
assent, it shall lie before both Houses of 
Parliament for at least eight full days of 

If the administration is to work smoothly, 
the Governor- General should be guided by 
the wishes of the people's representatives, 
as in the self-governing Dominions. The 
Governor- General of Canada, for instance, 


has the power to veto legislation, but he 
never uses it. The Ministry is responsible 
for every Act, the Governor-General's 
power and authority being similar to that 
of the King in the United Kingdom. The 
Dominion Parliament cannot be dissolved 
without taking the advice of the Ministry. 
' All discussions in the Legislature should 
be open, ensuring correct and speedy 
decisions, and providing a species of politi- 
cal education for the people. In other 
respects, too, it is to be hoped that the 
new Legislature may prove as modern and 
progressive as those existing in the self- 
governing Dominions. 

No provision is made for payment of 
salaries to members. In India, with its 
great distances, it is absolutely necessary 
that members should receive a salary, as 
in the United Kingdom, Canada, and other 
constitutionally governed countries. It is 
hoped that the Indian Legislature will itself 
take steps to bring about this reform. 

The Legislature will be called upon to 
deal with a variety of highly complex, 
urgent problems. India is not only large 


and populous, but her standard of economic 
development is low, and she is extremely 
poor. At every step, foreign and Indian 
interests clash. The refusal to constitute 
a federal system of Government will keep 
the Government of India highly centralized. 

It is imperative, therefore, that at least 
the popular chamber should have a long 
annual session to permit the adequate dis- 
cussion of vital questions, and also to ensure 
that the executive, which has not been 
made responsible, administers affairs in 
consonance with popular wishes. No statu- 
tory limit has been imposed, and rightly, 
because each House of the Legislature 
should be free to settle such matters for 
itself. If the Legislature is left unfettered, 
it will, no doubt, follow the example of 
the Imperial Parliament, and sit for not 
less than 200 days a year. 

To ensure that the administration of the 
various departments of State will be carried 
on according to Indian wishes, and also to 
provide opportunities for administrative 
training to Indians, standing committees 
of the Legislative Assembly should be 


formed at the beginning of each session. 
These committees may be attached to 
any department of government, and would 
serve the double purpose of keeping the 
official element in touch with public opinion 
and of securing attention to all important 
problems in which the public is interested. 

Commissions composed of members of 
the Legislature, experts, officials and co- 
opted members should be constantly at 
work investigating conditions and making 
recommendations on the more important 
and delicate problems, including those 
affecting Imperial and international inter- 
ests. The officials may join in the delibera- 
tions and advise, but need not vote. A 
Commission should be allowed to appoint 
its staff during the period of its existence, 
and should be free to correspond with 
foreign Governments for the purpose of 
collecting information. 

In Japan, committees on which officials 
and non-officials co-operate exist for pur- 
poses of promoting education, agriculture, 
industry and the like. India may advan- 
tageously follow that example. 


To investigate questions connected with 
the Central Government, particularly in its 
relation to the Home Government and the 
Provinces, the Central Government should 
send deputations to and maintain agencies 
in the self-governing Dominions and also 
in Japan. These agencies will study ques- 
tions connected with preparation for auton- 
omy, and supply any information required 
by the Central and Provincial Govern- 

If the central administration is to 
be rapidly raised to the position of an 
autonomous Federal Government, it will be 
necessary to standardize plans of action. 
As policies, practices or Acts are com- 
pleted, they should be immediately codified 
and put into operation as accepted facts. 
This process of standardization will be a 
guarantee of the steady progress for the 
necessary development work and the pre- 
paration for autonomous government. 

Apart from providing such machinery, 
the urgent work of development will require 
at least three new ministries, viz. : (1) a 
Ministry of Reconstruction, (2) a Ministry 


of Conservation, and (3) a Ministry of 
Labour and Civics. 

The Ministry of Reconstruction would 
deal with the many urgent problems men- 
tioned in this book, bound to arise in the 
transition from dependency to autonomy. 

A Ministry of Conservation will be needed, 
if only to co-ordinate the efforts of depart- 
ments and agencies concerned with material 

A Ministry of Labour and Civics will be 
required to train the people for new occupa- 
tions and for the opportunities afforded by 
the new powers of local government — a 
branch of education woefully neglected in 
the past. 

The new Act provides that, at the end 
of ten years, stock shall be taken of the 
work done, and recommendations made as 
to further administrative developments. 
The Indian Government should lose no 
time in formulating its ideas as to the 
various changes that may be needed, and 
taking practical action to bring them 

The Government of India must abandon 


its policy of contenting itself with the 
day's work and neglecting preparations 
for the future. Its success in the new era 
will be measured by what it will be able 
to accomplish in the next decade, to fit 
Indians for Dominion autonomy. 

It has already been noted that the 
Government of India is to maintain its 
own High Commissioner in London, to 
discharge " agency " duties which hitherto 
have been attended to by the India Office. 
That High Commissioner will have functions 
and powers analogous to those of the High 
Commissioners of the Dominions. India 
should be also granted the privilege, 
enjoyed by the Colonies, of sending her 
own representatives and High Commis- 
sioners to the principal countries of the 
world, for trade purposes. The Dominion 
of Canada, for instance, has recently been 
allowed to maintain a diplomatic repre- 
sentative of her own at Washington — a 
new departure even for a self-governing 

With the creation of an Indian High 
Commissionership in London, the India 


Office will, in future, deal solely with 
political matters. This change has been 
signalized by an innovation, which makes 
the salary of the Secretary of State a 
charge upon the Imperial treasury instead 
of that of India. 

Under the new scheme, the control of 
the Secretary of State over Indian fiscal 
matters is being relaxed. The Joint Select 
Committee prescribed that India ' should 
have the same liberty to consider her 
fiscal interests as Great Britain, Australia, 
New Zealand, Canada and South Africa," 
and " the Secretary of State should, as 
far as possible, avoid interference with the 
Indian fiscal policy when the Government 
of India and its Legislature are in agree- 
ment." His " intervention, when it does 
take place, should be limited to safeguarding 
the international obligations of the Empire 
or any fiscal arrangements within the 
Empire to which His Majesty's Govern- 
ment is a party." 

A standing committee on Indian affairs 
of both Houses of Parliament is to be 
appointed, at the beginning of each session, 


to advise the Secretary of State during the 
difficult period of transition that lies ahead. 

Sooner or later, it is presumed, there 
will be a constituent Assembly or Council 
for the British Empire. India should 
claim, on such a body, the position to 
which her size, importance and services 
to the Empire entitle her. 

India was permitted to send her repre- 
sentatives to the Peace Conference ; but 
no Indian representative was invited to 
the subsequent conference at Spa, although 
the representatives of the Dominions were 
so invited. The new Indian Legislature 
must see to it that she is not ignored in 
future conferences. All representatives of 
India in foreign countries should, more- 
over, be Indians. 

Having been admitted as an original 
member into the League of Nations on 
terms of equality with the Dominions, 
she must see to it that the mode of 
representation is such as to ensure the 
accurate expression of Indian views. 



The Government as reconstituted in each 
of the eight major provinces x is to be of a 
dual character. The part controlling the 
" reserved " subjects— namely, police, jus- 
tice, land revenue, forests (except in 
Bombay) and water supply, including 
drainage and irrigation — is to consist of 
the Governor and the Executive Council, 
half Indian and half British, and is to be 
independent of the Legislature. The 
"transferred" subjects — namely, local self- 
government, and the departments of educa- 
tion, local industries, industrial research, 
public works, agriculture, forests (in Bom- 
bay), medicine and excise — are to be 

1 Madras, Bombay, Bengal, the United Provinces of 
Agra and Oudh, the Punjab, Bihar and Orissa, the 
Central Provinces, Assam. 



administered by the Governor and the 
Ministers, generally with the consent of 
the Legislature. 

The great majoritjf of members of the 
Legislative Council will be popular repre- 
sentatives elected partly on a territorial 
and partly on a communal basis. In 
Bombay, for example, eighty-six of the 111 
members will be elected. The number of 
voters in that presidency will be about 
776,000. Each elected member, therefore, 
will represent on an average about 9,000 
voters. The total electorate for all the 
Provincial Councils in the country will 
number about 5,200,000. 

The Joint Select Committee clearly laid 
down that Ministers must enjoy the con- 
fidence of the elected majority ; that they 
shall be given the fullest scope in their 
own sphere, that Governors shall accept 
their advice and promote their policy 
wherever possible ; and also that members 
of the Executive Council shall afford all 
possible help and sympathy in dealing 
with proposals for development in the 
various departments. While anticipating 


that much advantage would result from 
such co-operation, they insisted that the 
duties of the two parts of the Government 
should not be permitted to become con- 
fused nor their separate responsibility 

The provincial revenues and balances 
are to be allocated between the two sides 
of the Government under rules so framed 
as to make friction unlikely. If, however, 
the Members of the Executive Council and 
the Ministers cannot agree as to their 
respective shares, the Governor may make 
such allocation as he may think fit, and, 
if necessary, can refer the question to such 
authority as the Governor-General may 
appoint. Pending the adjustment of 
claims, the total provisions under different 
heads of expenditure in the provincial 
budget for the preceding year are to hold 

Difficulties are certain to arise at the 
outset. Unless the Ministers selected from 
the Legislative Council are business men or 
otherwise trained in the conduct of affairs, 
they will need a little time to master the 


executive work of administration. The 
heads of departments, the majority of 
whom will be British officials, may not, 
it is feared, prove entirely sympathetic. 
On both sides tact will be required, and 
the patience and capacity for compromise 
of all concerned will be put to the 
severest test. 

It will not merely be a question of 
every one attempting to do the right thing. 
The Government of India Act assumes that 
the electorates will be inexperienced in 
carrying on responsible government, and 
the Ministers in conducting executive work. 
Behind all, in the background, however, 
will be the influence of vested interests, 
of which the Act takes no account what- 

The only manner in which difficulties 
can be overcome, conflict avoided and 
popular interest secured is for the entire 
Government to perform their functions in 
a constitutional spirit. A former Under- 
Secretary of State for India went so far 
as to state in the House of Lords, in the 
course of the debate on the Government of 


India Bill, that the " reserved " subjects 
" will have to be controlled with a very 
strong constitutional strain influencing 
them." Since the people's chosen repre- 
sentatives are to predominate in the legis- 
lative councils, only such policies as find 
legislative support should be put into 
effect. As the interests of the people 
become the interests of the Government, 
friction will be lessened, harmony pro- 
moted, and progress ensured. 

Considering the subjects to be dealt 
with, more Ministers will be required than 
the four apparently contemplated. Canada, 
with a population of only 8,000,000 persons, 
has eighteen Ministers. Some of the Indian 
provinces have a population exceeding 
40,000,000 persons, so there is nothing 
unreasonable in asking for at least twelve 
Executive Councillors and Ministers for 
the larger provinces. 

As suggested by the Joint Select Com- 
mittee, the salaries of Ministers should be 
voted by the respective Legislative Councils. 
The salaries of members of the Council, 
which at present range from Rs. 56,000 to 


Rs. 64,000, are excessive. Ministers should 
not be paid more than Rs. 36,000 per 
annum, though they may be given suitable 
travelling and entertainment allowances. 
In Canada, Ministers receive only about 
Rs. 21,000, while in Japan they receive 
but Rs. 14,400. 

There might be two grades of Ministers, 
one within and the other outside the 
Cabinet. Unless a responsible Minister of 
a province has sufficient time to study 
the larger questions — which will only be 
possible if there is a sufficient number of 
Ministers — the scope for progress and 
development will be very limited, and 
suggestions from members of the Legisla- 
tive Council may be inadequately met, or 
even resented. 

All official proceedings should be regu- 
lated by precise rules and Acts, and should 
not depend merely upon the personal views 
and wishes of the officials. The whole 
system of official secrecy should be abolished. 

Since, in future, the finances of provin- 
cial administrations will be separated from 
those of the Government of India, all 


payments, except the pensions of residents 
in the United Kingdom, should be made 
locally or through local agencies. The 
purchases for railways and Government 
institutions should also be made through 
local agencies, instead of through official 
channels, as at present. 

Unless the re-constituted Government in 
each province is to adopt an entirely new 
policy, the reforms will prove barren of 
results. Under the old regime, the mainten- 
ance of order was the chief concern of the 
administration. Henceforward progress 
must be the watchword. 

In preparing a programme of provincial 
reconstruction, one is faced with the initial 
difficulties presented by lack of homoge- 
neity within the provinces, and by pro- 
vincial variations. No attempt has been 
made to ensure that the provinces shall be 
approximately of the same area and popu- 
lation, nor even that each province will 
form a racial and linguistic unit. The 
following table shows at a glance some of 
these provincial variations : — 



Sq. miles. 








Bihar and Orissa 






Central Provinces 









United Provinces 



The new Government of India Act makes 
specific provision for the constitution of 
new provinces or sub-provinces. The Joint 
Select Committee did not think that any 
changes in the boundaries of a province 
should be made without due consideration 
of the views of the Legislative Council of 
that province. They were, however, of 
opinion that if the majorit}^ of the members 
of a Legislative Council representing a 
distinctive racial or linguistic territorial 
unit were to request that a separate pro- 
vince or sub-province be constituted, the 
Secretary of State should appoint a com- 
mission of inquiry, even though the majority 
of the Legislative Council of the province 
in question may be opposed to such a 


The provinces should be reconstituted 
so that none of them may have a population 
of less than 10,000,000 nor more than 
25,000,000 persons. A smaller unit is 
likely to be so weak as to find it difficult 
to resist the pressure of the Central Govern- 
ment, nor will it be able to command the 
resources to provide on a sufficiently large 
scale institutions and associations such as 
Universities, and departments of industry, 
commerce, agriculture and co-operative 
societies, necessary for rapid develop- 

In the forefront of the reconstruction 
problems should be put the expansion of 
the urban populations, the extension and 
improvement of educational facilities and 
economic development. The problems are 
interrelated and interdependent. More 
urban population is essential for carrying 
on the work of civilization. Without 
increasing the urban population it will be 
impossible to relieve the soil of the pressure 
under which it is groaning or to have 
economic development on a large scale. 
Similarly, any real advance in social and 



material progress is impossible without 
more and better education. 

The following figures show how small 
indeed is the urban population in India as 
compared with other countries : — 

Per cent. 

England ...... 


Canada ...... 


United States ..... 


Japan ...... 


India ...... 


Without considerable increase of urban 
population in the immediate future, it will 
be impossible for India to expand her 
industries, trade and commerce on a scale 
that will enable her to hold her own in 
the world. The economic interests will 
not be sufficiently safeguarded until the 
urban population is at least doubled. 

It is to be hoped that the elected Council 
in each province will be able to induce 
Government to provide sufficient funds and 
establishments to stimulate enterprise in 
these directions. It is, indeed, imperative 
that money be found for this purpose, 


no matter what sacrifices may be involved. 
As large a proportion as possible of current 
provincial revenues should be set apart, 
and for any balance that may be needed, 
loans, earmarked for educational and 
industrial development, should be raised in 
each province. This proposal is further 
elaborated in the chapter on " Finance." 

The Joint Select Committee suggested 
the creation of a Local Government Board 
for each province with a view to developing 
local self-government in cities, towns and 
rural areas. The new department, when 
constituted, should study the local govern- 
ment schemes of the Dominions and Japan 
before preparing its own plans. The new 
Municipal Act of Ontario (Canada) especially 
deserves careful consideration. 

The time is ripe for the grant of complete 
self-government to local bodies, with powers 
of borrowing for local productive under- 
takings. No doubt, at the outset, some 
local bodies may misuse their powers or 
make mistakes. Wisdom in such matters 
can, however, only be acquired in the 
hard school of experience. Fortunately, 


each governing body will be self-contained 
and, therefore, the evil effects of any 
mistakes that may be made need not extend 
beyond the area directly concerned. Prac- 
tice in local self-government should enable 
the people better to grasp the constructive 
issues involved in the more responsible 
spheres of provincial and national govern- 

Every means should be employed to 
increase the resources of the districts and 
sub-districts. Local corporations should 
undertake the construction of small tanks, 
canals, communications, including railways, 
and other works of public utility, the 
public interests being safeguarded, where 
necessary, by Provincial Acts and Charters. 
The formation of these corporations would 
provide practical work for the population, 
and would confer the greatest benefit on 
a district, especially if the capital was 
raised, and all the directors, experts and 
artisans were recruited, locally. 

At the beginning it may be necessary 
to obtain experts from outside, but if the 
control and direction be in the hands of 


the district authorities, the work would 
constitute a source of practical education 
to the people, who have hitherto lacked 
such opportunities for training. Enter- 
prises of this description, besides increasing 
production, will stimulate local patriotism 
and self-help. 

The development of productive works 
and public utilities will immediately pro- 
vide the Indian Ministers with great scope 
for remunerative enterprise. An irriga- 
tion scheme, for instance, which may cost, 
say, a crore of rupees, may, under favour- 
able conditions, add the gross value of a 
crore to the annual productive yield, in 
addition to returning interest on the 
capital expended. 

Although electricity comes under the 
head of " reserved subjects " there is no 
reason why hydro-electric works should not 
be developed by Indian agency with expert 
advisers. This has been done very success- 
fully in Mysore. 

The larger public works should be under 
national ownership, and their construction 
should be undertaken by indigenous 


agencies, while their subsequent manage- 
ment should be under public control. 

The Joint Select Committee suggested 
that standing committees of the Legislative 
Council be appointed in each province and 
attached to the more important Government 
departments. Presumably this plan will 
be adopted when the new constitution 
becomes fully operative. In addition, inde- 
pendent commissions will be needed to help 
to solve some of the larger problems of 
provincial administration. 

If we are to make substantial progress, no 
time should be lost in preparing for the 
task that lies before us. Civics and ele- 
mentary economics should form subjects 
for instruction in schools of all grades. 
Every city, town and village should have 
some sort of public association to spread 
knowledge of the various systems of respon- 
sible government practised by the self- 
governing Dominions and other constitu- 
tionally governed countries. 

It will conduce greatly to the success of 
the effort to provide adequate training in 
industry, trade and education, if the pro- 


vincial Governments arrange to send deputa- 
tions of local merchants, business men and 
educationists to countries like Canada, 
Japan and Australia, to learn the technical 
processes and methods of development 
employed there. 

An annual review of the work done to 
develop the capacity of the people and the 
country's resources should be discussed in 
every Legislative Council, and issued with 
Government authority. The various pub- 
lic bodies should also issue reports of their 
own activities so that the views of all 
parties engaged in speeding up the progress 
of the provinces may be available. 

Committees composed of officials and 
non-officials should be constituted in the 
districts, and even in the sub-districts, for 
the discussion of public questions. Even 
though these bodies will be of a purely 
advisory character, they will help to bring 
the executive into close touch with the 
people — a close touch which at present is 
entirely lacking. Through such intercourse 
the officials will lose their attitude of 
isolation and domination, and the people 


that awe of authority which is peculiar to 
India and stands in the way of co-operation 
and progress. 

An Indian who has travelled in foreign 
countries is struck with the difference 
between the official attitude towards the 
people in those lands and in India. Whereas 
in other countries officials regard themselves 
as public servants and make it easy for the 
public to approach them, in India far too 
many officials look upon themselves as 
rulers, and make approach difficult. This 
criticism, it is to be feared, applies with 
almost as much force to Indian as to 
British officials. 

An Indian who has travelled abroad is 
also likely to be struck with the contrast 
offered by the dispatch with which official 
work is performed in other countries as 
compared with the practice in India. 
Letters which, in other lands, would be 
answered the day they are received, in 
India remain unanswered in an office 
for days and even for weeks. Matters 
which would be decided finally in the course 
of a few days in any progressive country 


are lmng up in India for weeks and even 
for months. Legal delays are especially 

Much could be accomplished by simplify- 
ing the administrative routine. Much also 
could be accomplished by regulating the 
hours of work and the holidays. At 
present the officials do not begin work 
until 11 a.m., and that in a hot country 
where the early morning is the best time 
for work. They also stop work much 
earlier than do people in other countries. 
As to public holidays, no country comes 
anywhere near the Indian prodigality in 
that respect. In all these matters, the 
standards should be made to approximate 
to those prevailing in progressive countries. 

While no effort is neglected to make 
institutions fit in with local exigencies, 
the provinces, as far as possible, should 
be developed on a uniform basis. Indian 
national solidarity is the object to be aimed 
at. Any accentuation of provincial differ- 
ences will cut at the root of nationhood. 



" Local self-government has been de- 
scribed by a political philosopher as that 
' system of government under which the 
greatest number of minds, knowing the 
most, and having the fullest opportunities 
of knowing it, about the special matter in 
hand, and having the greatest interest in 
its well-working, have the management of 
it, or control over it.' Centralization has 
been described as that ' system of govern- 
ment under which the smallest number of 
minds, or those knowing the least, and 
having the fewest opportunities of knowing 
it, about the special matter in hand, and 
having the smallest interest in its well- 
working, have the management of it, or 



control over it.' An immense amount of 
wretched misgovernment might have been 
avoided, according to John Fiske, if all 
Legislators and all voters had those two 
wholesome maxims engraven upon their 

These words, quoted from an article by 
Mr. Henry Wade Rogers in the North 
American Review, 1908, indicate the value 
attached to local self-government by many 
leading Western minds. 

"The writers on political institutions," 
he says further, " have . . . taught us that 
under local self-government officials exist 
for the benefit of the people, and that under 
centralization the people exist for the 
benefit of the official; that local self- 
government provides for the political educa- 
tion of the people, and centralization, based 
upon the principle that everything is to be 
done for the people rather than by the 
people, creates a spirit of dependence 
which dwarfs the intellectual and moral 
faculties and incapacitates for citizenship ; 
. . . that the basis of local self-government 
is confidence in the people, while the 


fundamental idea of centralization is dis- 
trust of the people." 

Whilst not necessarily accepting these 
words without qualification, it is well 
worth Avhile for every Indian to weigh and 
consider them carefully in the light of his 
own country's situation. 

Most cities and many of the smaller 
towns of British India at present possess 
a limited measure of self-government ; 
but, as stated in the Montagu-Chelmsford 
Report, the local bodies have had little 
freedom in the higher spheres of adminis- 
tration and finance. No attempt has 
been made to introduce an efficient system 
of self-government in local areas either on 
the British or other foreign model, or to 
increase the urban population. 

The smallness of expenditure by munici- 
pal and district boards is another evidence 
of the low level of their activities. In 
1917-18, the municipal boards in all cities 
and towns spent less than £8,500,000, 
and the expenditure of rural boards, 
charged with the duty of meeting the 
rural needs of a population exceeding 


220,000,000 persons, amounted to only 
about £7,600,000. 

In rural areas special taxes for local 
purposes are levied on minor industries, 
vehicles, animals, etc., besides a sur-tax 
on land revenue. In most parts of the 
country the proceeds are mainly spent upon 
district roads, ferries, medical institutions 
and the like, and the establishments main- 
tained for the purpose. Little or nothing 
is allocated to meet the local needs of 
the villages which actually pay the taxes. 

One of the most important duties which 
the reconstituted Government in each pro- 
vince will be called upon to perforin will 
be to survey the field of local activities, 
study foreign experience, and pass a liberal 
measure of self-government suited to the 
peculiar conditions of the province. A 
Local Government Board will, no doubt, be 
created in each province under the new 
measure. The future progress of the 
country will depend upon the manner in 
which the new administration discharges 
this responsibility, for only by a thorough- 
going process of district life can scope be 


provided for popular initiative and the 
work of development accelerated. Active 
participation in local affairs will also train 
the people to administer their provincial 
and national affairs. 

In view of the fact that nine-tenths of 
the people in India live in villages, it is 
necessary that the new scheme of local 
self-government should not be confined to 
districts and sub-districts, but should ex- 
tend to the remotest hamlets, to discipline 
and stimulate rural life all over the coun- 
try. A system of village government is 
urgently needed to provide roads, water 
supply, irrigation, drainage, etc., and to 
introduce sanitary regulation and order in 
the villages. 

Many of the villages consist almost 
entirely of mud-built and thatched houses, 
and are so badly kept that they are little 
better than slums. The residents of villages 
lack social and political power, and have no 
effective means of civic union with then 
fellows to enable them to improve their 
condition by joint effort. Unless a proper 
system of village administration is intro- 


duced, local self-government will have no 
meaning to the vast rural population. 

The authors of the Montagu-Chelmsford 
Report seemed to favour the revival of 
the panchayets, which, owing to centraliza- 
tion of administration, have decayed. They 
were, however, not quite sure that a 
satisfactory scheme can be created " out 
of the present uneven materials." They 
have, therefore, left the question of village 
government to be dealt with by the recon- 
stituted provincial governments. 

What should be the unit of rural self- 
government ? "The Village " will be the 
answer which will most readily suggest 
itself. It has, however, to be recognized 
that many villages in India contain a pop- 
ulation of less than 500 persons and, 
therefore, an individual village by itself 
is incapable of providing for local needs 
according to anything like civilized 

If, however, the individual village is too 
small a unit, the sub-district (taluk) into 
which villages are grouped for adminis- 
trative purposes, is much too large for the 


cultivator to take an intelligent personal 
interest in local affairs. It is, there- 
fore, necessary to find an intermediate 
unit, which, while large enough to possess 
resources adequate to provide for local 
needs, will not be so large as to obscure 
that personal, intimate interest, without 
which local administration can never be 
a success. 

Japan, faced with a similar problem, has 
solved it by grouping some 72,000 small 
villages for purposes of local administra- 
tion into about 12,000 unions. By this 
method, the remotest village has been 
enabled to attain to a standard of local 
education, production, sanitation and com- 
munications, which would have been be- 
yond its capacity had it sought indepen- 
dently to meet such requirements. 

Each union contains, as a rule, from 
3,000 to 4,000 persons. Now and again, 
however, a group has a combined popula- 
tion as small as 1,000, or as large as 30,000 

One of the model unions which the writer 
visited during his recent tour in Japan, 


consisted of five hamlets or villages. It 
was about twenty-four square miles in area, 
and had a population of 5,493 persons. 
It comprised ten divisions, and had fifty 
sub-divisions or groups of dwellings. The 
union, as a whole, had a headman or 
Soncho. Each division and sub-division 
had, in addition, its own headman. 

The Soncho was elected by the people of 
the union subject to confirmation by the 
Governor of the prefecture (a section of the 
country corresponding to the Indian dis- 
trict). He was assisted in his duties by a 
council, composed of the divisional and 
sub-divisional headmen, elected by the 
people, and the officials. The people were 
usually guided by the decisions and advice 
of the council, special committees being 
appointed to settle disputes. 

In many villages, separate councils are 
not appointed, but the Soncho, or elected 
headman, administers the affairs of the 
village with the aid of the village officials 
during the intervals between which the 
village assembly meets. The village 
assembly passes the budget and records 


its decisions, which are afterwards ampli- 
fied and given effect to by the village 
council, when there is one, or by the village 
headman and his staff. 

That council constituted a working com- 
mittee of the union assembly, and formed a 
channel of communication between the 
union and the executive officer of the sub- 
district, who was in constant touch with the 
head of the prefecture. The latter, in 
turn, was in communication with the 
Central Government. The Government was 
thus able to understand the needs and 
answer the call of the remotest hamlet 
in the empire. 

The village union is a political entity. 
Neither the Central Government nor the 
prefecture (district) authorities interfere 
with the work of the unions, but on the 
contrary, make generous contributions to- 
wards the development of their industrial 
and social life and send experts to advise 
them. At the time of the writer's last 
visit to Japan, seventy-five village unions 
were in receipt of special subsidies for 
exemplary work in local government. 


The system of grouping villages for 
purposes of local administration which 
has been described, could be easily adapted 
to Indian conditions, without interfering 
with any of the existing arrangements 
for the collection of revenue or the mainten- 
ance of order in rural areas. A block of 
250 villages included, say, in a sub-district, 
may be merged into forty or fifty unions, 
each union, or group, consisting of, on an 
average, five or six villages, and having 
the most central village as the head-quarters 
of the union. Even ten or twelve thinly 
populated hamlets might form one union, 
while a village with a population of 3,000 
or more may stand by itself, and should 
be permitted to remain a unit of self- 

All the villages comprised in a union 
would elect a council of seven to twelve 
members. The council should have two 
committees — one to attend to routine busi- 
ness, and the other to carry on work of 

The union council may collect taxes 
and voluntary contributions of labour, and 


utilize them for improving roads and cart- 
tracks, drainage, water supply, irrigation, 
planting trees, and provide for lighting 
or such other needs and conveniences as 
their joint resources can supply. The 
field for self-improvement in this way is 
limited only by the energy, intelligence 
and activity of the people and their 
capacity for co-operative effort. 

The villages may at first be reluctant to 
pay taxes for local improvements, but 
when they come to realize that the money 
is spent locally for their own benefit, 
they will not grudge meeting the demand. 
This especially will be the case when they 
find that the expenditure of money on local 
improvements leads to greater production 
and to improved conditions of living. 

The duties of the village council would be 
regulated by the Acts of the Provincial 
Legislative Council, but there would be 
numerous other activities and wants which 
would have to be provided for by unoffi- 
cial organizations. Ordinarily, every union 
should have primary and vocational schools, 
a village hall or meeting-place, reading 


rooms, libraries, agricultural and co-opera- 
tive societies, a society for promoting 
rural public works, rural manufactures, 
study clubs, hotels and inns, young men's 
associations, and other social and civic 

These or any other institutions that may 
be wanting should be gradually brought 
into existence through the co-operation 
of the village council and local unofficial 
organizations. The whole question of 
organization is dealt with in a later chapter. 

Only by some such system of village 
government would it be possible to revive 
the instinct of self-help and self-improve- 
ment which has been lost through long 
disuse, and to place the Indian village on 
the road to health, comfort and prosperity. 

According to the census of India, a city 
is a residential area containing a population 
of 20,000 persons or more. The larger and 
more prosperous the area, the greater will 
be its opportunities and activities and the 
resources at its disposal to provide for local 
needs according to modern requirements. 


The administration of a city is entrusted 
to a municipal council, which will be sub- 
ject to the provisions of the Local Self- 
Government Act, and to the general rules 
prescribed by the Local Government Board. 
That council should have (1) a managing 
committee, and (2) an improvement board. 
The executive committee should maintain 
roads, water supply, drainage, parks and 
other public utilities, while the improve- 
ment committee should prepare and execute 
plans for all new works and improvements. 
The latter committee should collect in- 
formation as to how city work is carried 
on in progressive countries, and disseminate 
such information among the public to 
secure their interest and co-operation. 

One important duty of the improvement 
committee would be to prepare schemes for 
town-planning, following, as far as possible, 
the English town-planning models, con- 
sistent with the limited resources of Indian 
cities. Residential and industrial suburbs 
should be laid out, with a view to providing 
suitable sites for houses and for the estab- 
lishment of factories and workshops needed 


to provide occupations to a city population. 

Unofficial agencies will be required to 
attend to civic needs which may fall out- 
side the purview of duties of the municipal 

A city should have a municipal hall and 
offices, libraries and reading-rooms, a 
commercial and industrial museum, an 
inquiry office, and a sufficiency of hotels, 
restaurants and inns. As in Canada, some 
cities might assume entire control over 
technical and commercial education. 

Industry, commerce and banking should 
be specially encouraged, so that the city 
may become the centre of production and 
distribution for the neighbourhood. The 
necessary organizations such as a chamber 
of commerce, manufacturers', agricultural 
and bankers' associations and trade guilds 
for improving the economic life of the 
people, will be also needed. City organiza- 
tion would not be complete without reform 
societies, civic clubs, child welfare, and other 
public service organizations. 

In Britain and in the United States 
systematic civic surveys are made from 


time to time to investigate the conditions 
of the city and to suggest suitable measures 
of amelioration. These surveys deal not 
only with material needs, but also take 
stock of " the common life and institutions, 
and the tone and spirit of the people." 
Every city in India should be subject to 
such a survey, which should include vital 
statistics, education, production, distribu- 
tion of population according to occupations, 
trade, sanitation, public health, recreation 
and air spaces, housing, industrial condi- 
tions, charities, etc. Such surveys are best 
carried out by the citizens qualified for the 
work, aided by experts, and the results 
placed before the city authority and the 
residents of the city for discussion and 

Places containing 5,000 to 20,000 persons 
are regarded by the census authorities in 
India as towns. The town occupies a 
position midway between the city and the 
village. Town administrative bodies and 
public organizations will, therefore, occupy 
a position midway between those of the 
village union and the city. 


The town council should have (1) a 
managing committee and (2) an improve- 
ment board with functions similar to those 
of the city committees already described. 
There is abundant work in every town for 
improvement boards. Sufficient provision 
is not made as yet in many towns for their 
elementary needs, according to modern 
standards, in respect of roads, water supply 
and drainage. 

The local affairs of the district may in 
future be administered by district Assem- 
blies and district Boards, the former 
consisting of representatives from the 
village unions and towns in the dis- 
trict. The district Assemblies should elect 
the members of the Board, one-third 
of the members being re-elected every 

The Board will be the chief executive 
authority for all local works and affairs. 
Under the direction of the Board, or its 
committees, a secretary and executive 
staff will attend to the administration 
of local matters in the district, such as 
rural education, roads, cart-tracks, bridges, 


water supply, drainage, veterinary work, 
sanitation, medical control, etc. 

The Board and its staff will be maintained 
from the local funds of the district, contri- 
buted by the municipalities and village 
unions in the area, supplemented, where 
necessary, by special rates and contribu- 
tions from the Provincial Government. The 
local taxes may be collected by the villages 
themselves, and a percentage of the pro- 
ceeds, fixed by law, handed over for the 
expenses of the district Board. Special 
cesses may be levied for the purpose of 
constructing local works such as railways, 
tramways, road bridges, irrigation channels, 
and similar improvements, if the people of 
the locality who need them are willing to 
pay for them, the cesses being recovered 
from those who derive benefit from them. 

One of the chief duties of the district 
Boards will be the development of local 
resources and communications. Works 
carried out for the purpose may, in addition 
to benefiting the people of the locality 
concerned, form a source of income to the 
district Board itself. There is abundant 


scope for developments of this character. 

The construction of local works should, 
as far as possible, be entrusted to the people 
of the district, and the contracts given to 
corporations and companies formed in the 
area, with a view to affording training in 
business management, finding occupation 
for the people, and developing their execu- 
tive capacity. 

The work of the district Board may be 
carried on by two committees : one to 
concern itself with administration, and 
the other with formulating and execut- 
ing development and improvement pro- 

Ordinarily, the local work of the sub- 
district (taluk) may be carried out by 
officials appointed by the district Board. 
Separate sub-district Boards may, however, 
be established where the area or population 
is large. Such a Board will differ from the 
district Board only in degree and not in 
organization and duties. Where a sub- 
district is established, the district Board 
will be relieved of its responsibility for the 
work of the taluk, except in the matter of 


co-ordinating that work with the rest of the 

The district Assembly, already referred 
to, may meet once in three months to dis- 
cuss the wants and needs of the district, 
to exchange views with the provincial 
officials and to pass the budgets of the 
district Board. The district Board will be 
responsible for giving effect to the decisions 
and resolutions passed by the Assembly in 
matters which pertain to the work of the 

The district Assembly should serve also 
as a consultative body to help the provin- 
cial Government to carry on the work of the 
district. It might appoint committees to 
advise the district officials, either in regard 
to general affairs, or for any special or indi- 
vidual developments that may be in progress 
between any two sessions of the Assembty. 

For economic and other developments, 
committees of the district Assemblies may 
be constituted to advise officials of the 
departments concerned. The officials will 
also be present at the quarterly or other 
meetings of the district Assembly. Both 


the district Board and the district officers 
should be required to assist private organi- 
zations, and citizens' societies started for 
the purpose of training the people for 
responsible government, inculcating the 
idea of good citizenship and promoting 
culture, patriotism, discipline and thrift. 
It is hoped that in future provincial minis- 
ters and district officers will send advice 
and exhortations to the people from time 
to time, through the district Assemblies, as 
to the manner in which they should conduct 
themselves and co-operate with the provin- 
cial authorities in the work of local improve- 
ment and development. 

Leaders of public opinion should begin 
at once to make a careful study of foreign 
systems of self-government, and should 
start special journals to popularize models 
suited to Indian conditions and to educate 
the public. The people should abandon the 
idea once for all that development will come 
in the course of time without study, pre- 
paration, effort, or the expenditure of 
money, and should be prepared to pay 
taxes and to make sacrifices. 


Future developments in this respect will 
depend largely upon the character of the 
new scheme of local self-government to be 
introduced by the reformed provincial 
Governments, and upon the constitution 
and duties of the new Local Government 
Board to be established in each province. 



Many anomalies exist in the administra- 
tion of India's finances. 1 

The annual budget is prepared both in 
pounds sterling and in rupees, although 
the latter is the standard unit of value in 
the country. A large sum, at present 
amounting to about £29,000,000, is annu- 
ally budgeted for expenditure in the United 
Kingdom— mainly for military services, 
pensions and the purchase of stores. 

Other countries, the Dominions not ex- 

1 The rates of exchange generally prevailing at 
the outbreak of the War have been adopted through- 
out the book. On this basis the rupee (16 annas) is 
fixed at 16c?., and 15 rupees go to £1 sterling. 

A lakh of rupees (100,000) = £6,666 13s. 4d. ; a 
crore of rupees (10 millions) = £666,666 13s. 4d. 

The yen is about 2s. 0|eZ., so that 2 yen roughly = 
3 rupees. The American dollar is converted roughly 
at $4.85 to £1 sterling. 



cepted, make payments through banks for 
expenditure incurred abroad. They pur- 
chase the necessary stores within the 
country itself through local firms. 

Silver continues to be the internal cur- 
rency of India — though many years ago an 
official committee recommended the estab- 
lishment of a gold standard for India, and 
though gold is the standard accepted in 
all civilized countries. While the British 
sovereign is legal tender in India, there is 
no corresponding legal obligation in the 
United Kingdom to recognize the rupee, 
nor has there been any serious attempt to 
make the rupee convertible into gold in India 
at all times. 

British trade with India is not left to 
follow its own course, but by means of 
council bills, telegraphic transfers and 
reverse drafts is financed through the 
Secretary of State. The gold exchange 
and paper currency reserves, running into 
something like £100,000,000, are held in 
London instead of being retained in India 
to promote Indian credit and to help 
Indian trade, and loans at low rates of 


interest are made therefrom to British 
traders. It has been truly said that the 
Secretary of State is both the ruler and 
banker of India. 

All departments of Indian finance are 
inter- penetrated by the influence of British 
trade. As Lord Bryce says : — 

" The more any public authority or any National 
Government either itself undertakes or interferes with 
the conduct by private persons of any matter in which 
money can be either made or spent, the more grounds 
does it supply the private persons for trying to influ- 
ence its action in the direction which will benefit such 
persons." * 

If this occurs in a National Government 
the evil effects in a dependency will be far 

The financiers with whom the writer 
has discussed the question consider the 
system of finance followed in India as 
highly prejudicial to Indian interests. 
Under an effective international currency, 
that is, gold, all the Indian money would 
go back to India and be available for expan- 
sion of credit there, so as to benefit Indian 

1 The Hindrances to Good Citizenship, by Lord Bryce, 
p. 45. 



trade and industry. The present condi- 
tions of exchange in Europe and America 
make it imperative for India to adopt an 
effective gold standard. In normal times, 
the balance of trade has in most years 
been in favour of India, so that an effective 
gold standard was always a practicable 

During the War, on account of her depen- 
dent position, the monetary affairs of India 
were controlled from London. The people 
suffered from high prices. The war profits 
went to a very small percentage of business 
men. Mairy commodities were purchased 
very much below the world prices. Food 
control was exercised secretly, without the 
public being aware of the extent to which 
food was exported. Great mortality was 
caused through lack of proper sustenance 
during the influenza epidemic. The export 
of articles such as hides was controlled in 
order to secure them for Britain and her 
Allies below the market value. In order 
to maintain artificial conditions of ex- 
change, ordinary trade in rice, jute, timber, 
wheat, hides and other articles was pro- 


hibited on private account, and in some 
cases stopped. India lost heavily on her 
investments in England, and her own 
money in the currency reserves remained 
locked up in England. Large purchases of 
silver were made through commercial 
agencies instead of in India itself. 

A self-governing Dominion would, while 
all the time loyally helping Great Britain, 
have greatly added to her own wealth. 
Canada, as one of her statesmen told 
the writer, in spite of the sacrifices she 
made for the War, is at present " rolling 
in wealth." Japan and the United States 
have immensely strengthened their econo- 
mic and financial position. The United 
States is now leading the world both in 
trade and finance, and is the only free gold 
market of to-day. The War gave Japan 
the opportunity which foreign competition 
had withheld from her. Under capable 
Indian, or even pro-Indian, management, 
India's economic position could have been 
immensely strengthened, and what she lost 
within the last fifty years might have been re- 
stored to her during the five years of the War. 


The large sums of money annually bud- 
geted for military expenditure are difficult 
to justify, especially when it is remembered 
that India is a dependent and not an inde- 
pendent country. 

In the budget for the year 1920-21, 
£41,000,000 has been set aside for purposes 
of defence. This amounts to nearly half 
the total net revenue of the country. Mili- 
tary expenditure on such a scale in peace 
time is without parallel in any country in 
the world. Britain spent much less on her 
army in pre-war times. Even the Japan- 
ese Empire spends only a fraction of this 

In view of the altered conditions, the 
whole military and naval expenditure and 
defence organization of the country must 
be placed on a new basis. This work should 
be entrusted to a commission comprising 
an adequate number of Indians, as soon as 
reasonably possible after the reformed 
government comes into being. 

The report of the Esher Committee on 
Indian Army Reform just issued (October, 
1920) reveals the dangers to which Indian 


finance and the Indian constitution is 
exposed in the future. Even the London 
" Times " considers the report very extra- 
ordinary since in a sense the proposals 
amount to handing over the army in India, 
and half the Indian imperial expenditure, 
to the direct control of the British War 
Office. Under the scheme, all the Indians 
have to do is to find the money. One won- 
ders what a Dominion government would 
sa}^ if such a proposal were placed before it. 

Lord Macaulay stated in 1833 when the 
East India Company's Charter was renewed 
for the last time, that the Indian revenue 
was larger than that of any country in the 
world except France. That position no 
longer exists, though since then large and 
populous tracts of territory have been 
added to the Indian Empire. 

While, during the twenty years ending 
1913-14, the revenue in India increased by 
about 36 per cent., during the same period it 
expanded 115 per cent, in the United King- 
dom, 245 per cent, in Canada, and 640 per 
cent, in Japan. These figures, sufficiently 
accurate to serve as a basis of comparison, 


show that while those countries have been 
making rapid progress, India has practic- 
ally stood still. 

Canada, with a population of a little over 
8,000,000 persons, yielded a revenue of more 
than £34,000,000 in 1916, or £45,000,000 
including provincial revenue. With a 
population thirty times as large, British 
India yielded only double that amount. 
But whereas Canada has been free to 
develop her resources, India has been in 
leading strings. 

Though the increase of revenue is small, 
the administration is costly, and its 
demands are constantly growing. 

The sources from which the Government 
of India derives its revenue have certain 
distinctive features due to India's position 
as a dependency. In the United Kingdom, 
for instance, the principal sources of 
revenue are customs, excise, estate duties, 
property and income-tax, posts, telegraphs, 
etc. In the United States they are excise, 
licences and other internal revenues, customs, 
postal revenue, etc. In Canada they are 
customs, excise, public works, and income- 


tax (during the War). In India, on the 
other hand, customs revenue and income- 
tax have been kept very low. The sheet- 
anchor of Indian finance, to use the phrase 
of a finance member of the Government of 
India, is land-tax, which is drawn from the 
poorest of the poor, and amounts to about 

Indian revenue can easily be doubled in 
ten years and trebled in fifteen if a satis- 
factory policy for the development of 
education and of production from industries 
and agriculture is adopted, and many of 
the restrictive influences incidental to the 
position of a dependency are removed. 

Another unique point in respect of 
Indian finance is that the entire proceeds 
from all the provinces are swept into the 
central treasury, and sums doled out to the 
provinces, not according to the demands 
or needs of the population, but according 
to the wishes of the Central Government 
or of the India Office, because the Secre- 
tary of State in Council determines all the 
appropriations of the Government of India. 
The discussion of the Budget in provincial 


Councils, or even in the Imperial Council, 
has, therefore, been futile, and no real 
opportunity has been afforded to initiate 
large economic or social experiments in any 
of the provinces. 

Orders have now been issued to separate 
provincial from central finance. The manner 
in which effect is being given to the orders 
so far cannot, however, be regarded as 
satisfactory, since the complete separation 
of finance is not being insisted upon. Nor 
has any attempt been made to readjust, 
on an equitable basis, the contributions 
levied from the various provinces by the 
Government of India. Madras and the 
United Provinces, though both economically 
weak, are most unfairly treated, and this 
injustice is to continue. 

The central revenues should be restricted 
to a few specific imposts such as customs, 
net income from railways and income-tax. 
As a cardinal principle of finance, the whole 
field of taxation, excepting those few taxes 
levied by the Central Government, should 
be in the hands of Provincial Governments. 

The gross railway revenue and expendi- 


ture as entered in the budget swells the 
figures in a misleading manner. 

The railways should be carried on by the 
Government through indigenous agencies, 
to be trained at once for this purpose, and 
administered in the interests of the popula- 
tion, and not, as at present, merely in the 
interests of Government revenue. 

The separation of provincial finance will 
ensure that money raised locally will be 
spent locally. That will inspire confidence 
in the tax-payer — confidence which will 
make it possible to collect more revenue 
in the provinces, as experience has proved 
in the United States and Canada. 

Cities and towns should be permitted to 
contract loans, subject to recognized re- 
strictions, for public utilities and productive 
works, if the interest charges and sinking- 
funds can be met from local taxes and rates. 

If the system of grouping villages for 
purposes of local administration, recom- 
mended in the preceding chapter, is 
adopted it would be easy to develop a 
satisfactory scheme of rural finance. After 
meeting the urgent current expenditure on 


sanitation, repair and maintenance of roads 
and lighting, the balance available should 
be devoted to : — 

(1) Education. 

(2) Local improvements ; and 

(3) Measures necessary totrain the people, 

and to improve the economic and 
social condition of the poorest 
among them. 
The principle of making the locality raise 
half the money needed for education and 
other development purposes, and obtaining 
the other half by provincial grants, may 
answer well for most provinces for the present . 
The division of revenue between the 
central, provincial and local authorities 
leaves much to be desired. In 1914, for 
instance, the imperial and provincial ex- 
penditure in India was £85,000,000 ; district 
and sub -district expenditure, £3,900,000 ; 
municipal, £5,400,000 ; making a total 
of £94,300,000. In Japan the correspond- 
ing figures were £59,000,000, £8,000,000, 
£21,000,000, and a total of £88,000,000 
respectively. Whatever the discrepancy in 
the basis of comparison, the statistics are 


accurate enough to show that the local 
expenditure in Japan is very much greater 
than it is in India, notwithstanding the 
fact that the rural population of India is 
much larger. 

Calculations made upon the basis of 
rough estimates of gross annual income 
before the War, show that taxation in 
India bears a higher proportion to the 
income of the tax-payer than it does in 
most civilized countries. In the United 
Kingdom, for instance, the gross annual 
income before the War was estimated at 
about £2,300,000,000, and the national 
expenditure at about £200,000,000, or less 
than one-eleventh. For India the corres- 
ponding figures were £600,000,000 and 
£83,000,000, or a little over one-seventh. 

According to the late Mr. Justice Ranade, 
who for a long time administered the Deccan 
Agriculturists Relief Act under the Bombay 
Government, the land-tax encroaches upon 
the profits and wages of the poor peasant, 
who has to accommodate himself to a low 
standard of life with every increase of 
economic pressure on his class. In the case 


of smaller payments, the land-tax interferes 
with the means of subsistence, and in the 
case of larger ones it discourages agricultural 
development. From whatever point of 
view it is considered, the tax in its present 
form is harmful. 

The taxable incomes in most countries 
are reckoned upon people's earnings after 
deducting whatever is needed for a fair 
subsistence allowance. The finances in 
civilized countries are tending towards 
complete exemption from taxation of all 
persons whose incomes fall below a certain 
minimum. If such a test were applied to 
the Indian cultivator, a great majority of 
his class would not be liable to pay any 
tax at all. But the land-tax can be adjusted 
only when a more equitable system of 
taxation has been made possible by 
economic developments. 

As regards excise from alcoholic drinks, 
which is a considerable source of revenue at 
present in India, it is desirable to aim at its 
abolition as quickly as possible, because it is 
derived by encouraging vice among the people. 

The United States has "gone dry," and 


the Canadian Provinces are following the 
example. Scotland has lately begun voting 
upon local option. There is in England 
a strong movement in favour of this 
reform. Why should not India, where 
the higher classes are not addicted to drink, 
be permitted to ban liquor by means of 
a similar process, gradual enough to per- 
mit the necessary financial readjustment 
to take place ? 

Since national exigencies demand the 
development of education and industries 
at an unprecedented rate, and since, for 
some years, it is not possible to provide, out 
of current revenue, the large sums needed 
for the purpose, it is necessary that a loan 
averaging about fifteen crores per annum 
be raised for these purposes during the 
next ten years. 

A loan for education is unusual, but so 
are India's conditions. The Japanese 
Government has not hesitated recently to 
float a loan for education, though great 
educational progress has already been made, 
and though the Diet opposed the loan on 
the ground that education was not a 


business transaction nor a productive public 
work. In India, the position is exactly 
the reverse. The people's representatives 
have been clamouring for more and better 
education, and the Government has been 
pleading financial inability, though that 
did not prevent it from incurring a sub- 
stantial amount of unproductive war debt. 
An addition of at least an equal amount 
(133 crores) for education, industries, and 
other development purposes could hardly 
be regarded as piling up unproductive debt. 

Each province may be permitted to raise 
money internally. If credit and confidence 
are established, there is no reason why these 
internal loan operations should not prove 

The public debt of India is made up as 
follows : — 

Ordinary war debt . 
Productive railways 


of Rupees. 






To this will have to be added in future, 
as stated above, a yearly loan of fifteen 
crores for ten years to come. Such increase, 
in addition to any increase in taxation, 
will be cheerfully faced by the people, if 
they are sure that the proceeds will be 
applied strictly to the purposes mentioned. 

As currency and banking will be dealt 
with in a later chapter, it is here necessary 
only to draw attention to the great import- 
ance of establishing a federal banking 
system with a central control, giving India 
an effective gold standard and separating 
Indian finance from British trade with 
India. Similarly, as the subject of fiscal 
autonomy will be treated later, it is merely 
necessary to state here that the true basis 
of Indian progress will be established if the 
India Office control of the Indian finances 
ceases, if payment of " home charges ' is 
made through the London branch of the 
Indian Central Bank or banking system, 
and if India is permitted to redistribute 
the incidence of taxation and expand her 
finances as suits her best. Fiscal recon- 
struction should be the corner-stone of 


the economic and social edifice of the 

The entire subject of Indian finance needs 
to be impartially investigated, if for no 
other reason than to remove the suspicion 
entertained by well-informed unprejudiced 
persons who believe that financial anomalies 
have been permitted to grow up in order 
to preserve British monopoly over the 
Indian trade and hold Indian gold in 
London. A commission for that purpose 
should be appointed as early as possi- 
ble. It should be composed of two- 
thirds Indian representatives, and the 
remaining one-third of experts and officials. 
The commission should be permitted to 
appoint its own staff and to carry on 
direct correspondence with the Dominions 
and foreign countries, and to submit recom- 
mendations. It seems desirable that such 
a commission should be appointed at once, 
and maintained for four or five years, until 
the finances are all brought into a condition, 
as near as circumstances allow, to that of 
Canada or Australia, because only by plac- 
ing the Indian finances upon a Dominion 


basis can the anomalies which exist be 

The currency policy should hereafter be 
settled by the Government of India with 
the approval of the Indian Legislature and 
Indian public opinion. There should be no 
delay, therefore, in the establishment of a 
commission for five years, and of a perman- 
ent financial committee of the Central 
Legislative Assembly and similar bodies in 
each province, as suggested. Experts and 
officials, though represented on these central 
and provincial legislative committees, should 
have no power to vote. It is to be hoped 
that, in future, there may be complete 
open dealing and publicity in regard to 
all money transactions. 

Economic Reconstruction 



Now that a measure of self-government 
has been vouchsafed to India, and the 
Joint Select Committee has clearly stated 
" that she should have the same liberty 
to consider her " fiscal " interests as Great 
Britain or any self-governing Dominion," 
it should be easy to reconstruct her trade 
and industry, and to develop her natural 
resources in a manner not hitherto possible. 

The lines on which economic reconstruc- 
tion should proceed will be better under- 
stood if a rapid survey is made of the 
methods pursued in the United Kingdom, 
Canada, the United States of America and 
Japan to increase production and to pro- 
mote trade and industry. 

Ever since the reorganization of the 



national life for war purposes, there has 
been more vigorous thinking and more 
definite suggestions in regard to social 
experiment in Britain than, perhaps, in 
any other country. Not long after hostili- 
ties began, a committee on reconstruction 
was constituted. This was later converted 
into a department, which, if it did nothing 
else, issued a series of pamphlets containing 
much valuable information on various 
phases of reconstruction — information 
which needs to be carefully read in India, 
and adapted to Indian requirements. 

Four broad economic tendencies are at 
present noticeable in Great Britain : 

Firstly, the Government is taking direct 
action to secure maximum production in 
essential industries and to stimulate inven- 
tion. The most important instances are 
the encouragement of agricultural produc- 
tion during the War, and the determined 
endeavour to occupy the first place in 
the matter of manufacturing dyes. With 
this is connected the realization, slower in 
England than in Germany and the United 
States of America, of the paramount value 


of scientific research in industry — as, for 
example, in the setting aside of a sum of 
a million sterling by the Department of 
Scientific and Industrial Research for grants 
in aid. 

Secondly, the Government has been 
forced by clamorous need to assist local 
authorities and private enterprise in so 
fundamental a service as housing. Years 
before the War, it was becoming clear that 
the re-housing of the greater part of the 
population, especially the agricultural 
labourers, was an urgent problem which 
could be solved only by a comprehensive 
national policy. Since the War all doubts, 
even of the most convinced advocates of 
the policy of laissez-faire, have been swept 
away, and the Government has undertaken 
the task. 

Thirdly, despite disinclination on the part 
of the present Ministry, there is an increas- 
ing trend of public opinion towards the 
State control of the essential national 
services, especially mines and transport. 
Nothing, it is evident, can check the growth 
of the enormous combines which are the 


distinctive economic characteristic of the 
age — in textiles, leather, oil, coal, steel 
and shipping. 

As a result of the War, there have been 
many amalgamations of trade and business 
interests. At present five great combines 
do most of the banking in England. 

Fourthly, the tendency towards the ex- 
tension of public control and the workers' 
demand for an altered status is equally 
irresistible. No longer is it possible, with 
the transition from free competition to vast 
modern combines, for the community and 
the Government to be left out of the 
concern, while, on the other hand, the 
workers of every class and kind declare 
themselves emphatically against the con- 
tinuance of a wage system divorced from 
responsibility in management. Four years 
ago, the first authoritative recognition of 
this development came with the report 
issued by the Whitley Committee, recom- 
mending joint industrial councils, upon 
which representatives of the workers and 
of the employers should sit together. Since 
the last year of the War, there has been a 


remarkable expansion of the Industrial 
Council movement, which is universally 
regarded as a first stage in the transfer of 
control. Of greater importance still is 
the development in railways and mines 
which is destined to lead, in a brief period, 
to entirely new forms of ownership and 

An Imperial Trade Investigation Board 
has been set up, and a private British 
Trade Corporation has been established 
under Royal Charter with the express 
object of financing and developing foreign 

When so industrially advanced a country 
as Britain finds it necessary to make 
breaches in her policy of free trade, how 
can the policy of laissez-faire be continued 
in India, which is still in the agricultural 
stage ? 

Canada, like India, is essentially an agri- 
cultural country, but while the Dominion 
authorities realize the futility of depending 
merely upon agriculture, effort is made to 
keep India agricultural. The latest figures 


for Canada * show that the total production 
from industries and manufactures exceeds 
that from agriculture. The volume of 
manufactured products, which are protected 
by a tariff duty averaging about 25 per 
cent., is constantly increasing. Banking 
is also advancing at a rapid rate, and a 
notable movement for international banking 
expansion has begun. 

The Canadian Government has at the 
present time concentrated its attention 
upon increasing and extending foreign trade. 
The Department of Trade and Commerce, 
the most important national organization, 
and the Department of Finance and Bank- 
ing are working assiduously to this end. 

Attention is being given to the Com- 
mercial Intelligence Service, and large 
schemes have been projected for the en- 
couragement of industries. All the public 
departments are energetic in preparing and 
circulating reports and bulletins. A weekly 

1 Current production, 1917 : — Dols. 

Agriculture . . . 1,621 millions. 







bulletin with a large free circulation is 
issued by the Federal Government. Indeed, 
the Canadian Governments have set a 
standard in the matter of promoting in- 
dustrial education and providing assistance 
through public agency and propaganda. 
The importance of such help cannot be 

The Dominion Government deals chiefly 
with the survey service and foreign trade, 
while the actual work of exploiting national 
resources and giving assistance to business 
concerns is left to the Provincial Govern- 
ments. A single province has recently 
made appropriations of nearly $2,000,000 
for the establishment of new industries, 
and is prepared to lend dollar for dollar 
when private individuals and corporations 
signify their desire to start them. In 
eastern Canada municipalities grant facili- 
ties to encourage small industries. 

The Indian practice stands in direct 
contrast to the Canadian standards. The 
Central and Provincial Governments in 
India are extremely chary of subsidizing 
any industry. There was in recent years 


at least one occasion on which orders went 
from London which in substance prohibited 
the active encouragement of industry. 

In the United States of America, as in 
Canada, industries have been protected by 
a high tariff wall, though American indus- 
trialists, by their ability to combine, have 
been able to do without Government sub- 

Americans have, of course, been greatly 
helped by the abundance of their resources, 
both in materials and in trained men. 
Industries have reached an adolescent 
stage, and many of them can safely dispense 
with protective duties. 

Extensive use of labour-saving machinery 
and motive power and economic and 
efficient management of business distin- 
guish American industry. 

Huge industries and mammoth trusts 
have grown up. 

For instance, the annual business of the 
Ford Motor Company at Detroit approxi- 
mates $350,000,000. The average number 
of employees regularly on the pay roll is 


about 36,000. The plant turns out a 
complete motor-car every twenty-nine 
seconds and, in conjunction with its branch 
factories, has a record of 3,000 cars made 
in a single day of eight hours. 

The wealth of individual citizens has 
risen to prodigious proportions. Mr. John 
D. Rockefeller's fortune is estimated at 
three billion dollars and his income at one 
hundred million dollars a year. 

The banking work of America is carried 
on by 8,000 or 9,000 principal banks, each 
of which is a member of the Federal Reserve 
Bank of the district in which it is situated. 
There are twelve Federal Reserve Banks, 
controlled by a Federal Reserve Board at 
Washington. The Board has recently 
agreed to establish branch banks abroad, 
and there is a move in New York and 
Washington at present to help the Central 
and South American States to place their 
currencies on a gold basis. 

Another characteristic of American busi- 
ness organization is the Chambers of Com- 
merce or Boards of Trade established 
throughout the country. The Centraj 


Chamber of Commerce of the United States 
comprises the combined forces of Ameri- 
ca's leading commercial organizations. It 
represents the body of American business 
men at the seat of the Federal Government 
at Washington, where it maintains an 
executive Board. Manufacturers and busi- 
ness men serve on its committees. It has 
a staff of experienced experts, conducts 
bureaux of administration, organization 
service, research, industrial relations and 
service to members, and has at its command 
an editorial staff with a national vision, 
and a field force to reach its nation-wide 

The reconstruction aims of the American 
nation at present, briefly stated, are : 
(1) increased production in industries and 
agriculture ; (2) extension of foreign trade, 
and (3) increase of American shipping. 

Americans have realized that shipping 
and all the correlated improvements per- 
taining to a merchant marine are necessary 
to the expansion of the general trade of the 
country. They have realized that lack of 
shipping has handicapped their foreign 


trade. Shipping is, therefore, receiving 
the largest amount of attention of both the 
Government and the people at the present 
time. In September, 1919, a prominent 
business man in New York, in course of 
conversation with the writer, remarked that 
the shipbuilding going on in the country 
over-shadowed every other activity. The 
coast is filled with shipbuilding yards. 
The biggest shipbuilding plant in the world 
is at Hog Island. Created as a war 
measure, it is now used for building 
merchant ships. Fifty ships can be built 
there at the same time. 

Shipping is entirely under the control of 
the Shipping Board, which builds ships and 
sells them to private firms. America is 
convinced that where a great volume of 
tonnage is congregated, competition fixes 
the lowest rates. 

Both Government and the people are 
doing their utmost to expand foreign trade. 
The Government is training at Washington 
a number of young men who, after passing 
an examination in exports and imports, 
are to be sent to European countries as 


trade agents, to foster export business. 
The Bureau of Foreign and Domestic 
Commerce disseminates the information 
received from its Trade Commissioners and 
foreign commercial Attaches, by means of 
reports, by a daily newspaper, and by the 
publication every month of statistical in- 
formation, of which a summary is pub- 
lished annually. 

A new plan adopted to stimulate foreign 
trade includes (1) moving pictures, to 
acquaint the people of other countries with 
American goods and manufactures ; (2) 
the exhibition of foreign samples of 
machinery and manufactured products ; 
and (3) a carefully classified collection of 
the documents used in foreign trade. 

Since all industrial progress in Japan 
has been achieved in comparatively recent 
years, she offers to India the most direct 
and valuable lessons obtainable in material 
advancement and reconstruction. 

In Japan direct relations exist between 
the Government and industry. There 
pioneer industries were, indeed, set going 


and, for years, maintained at the public 

Down to thirty years ago, for instance, 
the Government, as owner of shipyards, 
was able to give direct assistance and 
guaranteed dividends to chartered com- 
panies. A law passed at the close of the 
century was designed to encourage ship- 
building by means of Government subsidies 
of from 11 to 22 yen per ton. Great trade 
expansion resulted from this policy, and 
the shipbuilding industry became so firmly 
planted and prosperous that about ten 
years ago the Government was able to 
withdraw from active participation in it. 
Subsidies in the shape of fixed annual 
sums, however, are still granted to enable 
shipping lines to send vessels to fresh 
destinations. It is impossible to dispute 
the results of this policy. Before the War, 
Japan stood seventh among the maritime 
nations. To-day, she occupies the third 

Among Japanese statesmen, the view 
prevails that the unifying effect of the wars 
with China and Russia was felt strongly 


and permanently in the field of collective 
and industrial effort. It is certainly true 
that the industries of Japan received an 
impetus from both conflicts. 

Apart from such stimulus, the Japanese 
Government has set an example of con- 
sistent and continuous thought and action 
with a constructive social purpose. Re- 
search work is carried on at the Universi- 
ties, chambers of commerce, societies and 
guilds in every large city, and, as far as 
possible, in the smaller towns, many of the 
associations having their duties fixed by 

Two large experimental stations at Tokyo 
and Osaka work in close touch with manu- 
facturers and are constantly engaged in 
experiments calculated to improve old 
industries and to advance new ones. 
Institutes of Science started by private 
companies are aided by Government and 
by the Imperial Household. The institutes 
of technology and the Universities give 
thorough instruction in mechanical and 
chemical engineering, and in economics. 

In Japan, of course, industries are carried 


on under protective tariffs ranging from 
twenty to sixty per cent. 

The formation of voluntary industrial 
associations is encouraged by law. The 
erection of steelworks is encouraged by 
concessions of land and by special tax 

So also in the departments of banking 
and commerce. The authorities in Japan 
consider that the banking system of the 
country, which has been developed and 
perfected after a careful study of condi- 
tions in all foreign countries, is quite 
satisfactory. They maintain a central 
bank, viz., the Bank of Japan, as the apex 
of the system. This is the only note- 
issuing bank. Each prefecture has a private 
bank of its own, which does corresponding 
duty for the Government of the prefecture. 
The industries of the country are helped 
by a Central Industrial Bank, which is 
authorized by Government to issue bonds 
to the extent of ten times its paid-up 
capital. Agricultural banks give agricul- 
tural loans. The Yokohama Specie Bank, 
which is also helped by Government and 


which has numerous branch banks in 
foreign countries, is most useful to Japanese 
merchants doing business abroad. 

The Japanese Government keeps in close 
touch with merchants and with the foreign 
markets, watching the supplies of raw 
materials and the openings for manufac- 
tured articles. There are from sixty to 
seventy chambers of commerce and thirty- 
seven commercial museums established by 
prefectures, districts and cities. At Harbin 
and at Singapore, similar institutions dis- 
pla} r , side by side, the products of Japan and 
those of competing nations. In the matter 
of trade agents and syndicates for the 
exploitation of markets outside their own 
country, the Japanese are certainly as 
alert and enterprising as any people in the 
West. Not only do the} 7 endeavour to 
keep in touch with the world's activities, 
but they work upon the principle that it is 
a good thing for Japan to take part, as far 
as may be, in every department of those 

Japanese embassies and consulates are 
notably energetic in collecting material and 


making reports. These are speedily placed 
at the disposal of the public — as often, 
indeed, as twice a week. Japanese mer- 
chants are encouraged to travel abroad. 
In 1916 the Japanese Government dis- 
patched a commission of ten members to 
the United States. When such commis- 
sions are chosen by the Government of 
India, there is usually not an Indian on 

Commercial students to the number of 
about eighty every year are sent out to 
foreign countries after being given such 
local equipment as may be possible. The 
system was started about twenty years ago 
and already nearly 600 experts and business 
men have been trained in this way. 

The first lesson to be drawn from this 
survey by the Government and the people 
of India is that industries and trade do not 
grow of themselves, but have to be willed, 
planned and systematically developed. In 
none of the countries that have been 
named — certainly not in England, not even 
in laissez-faire America — has Government 


kept aloof from the industrial activities of 
the people. On the contrary, in the earlier 
stages and in the present developed condi- 
tion alike, Government has entered ener- 
getically into the service of commerce and 
industry. This especially is the case in 
Japan, whose industrial policies India needs 
to adopt as far as possible, if she desires 
rapid progress. 

In India, Government has shown some 
enterprise in developing railways and 
irrigation ; but the expansion of trade and 
industry has been a matter of British 
domination and has left the people of the 
country disinherited, with no share in the 
control of policy or its operation. 

The times are rapidly and decisively 
changing. It is no more possible, to-day, 
for the industrial exploitation of India to 
continue without the participation of the 
Indian people themselves, than it is for the 
working people of Britain or the United 
States to return to their pre-war status. 



To understand the present position of 
India's foreign trade, it is necessary to 
compare the figures for the four years 
ending 1914 and 1918 respectively. During 
the four years ending 1914, the average 
annual exports amounted to £155,000,000 
and imports to £106,000,000, representing 
an average total trade of £261,000,000. 
The corresponding figures for the four years 
ending 1918 were £146,000,000, £101,000,000 
and £247,000,000 respectively. 

If due allowance is made for the rise in 
prices between 1913-14 and 1917-18, which 
amounted to 111 per cent, for imports and 
25 per cent, for exports, it will be seen that 
the volume of trade in the latter year was 
considerably less than may be inferred 
from the mere value. 




The following table shows at a glance 
the effect of the War on India's foreign 
trade as compared with that of some of the 
principal countries of the world : — 


Trade per head 
in 1913-14. 

Trade per head 
in 1918-19. 

United Kingdom . 
United States 
India . . . 






In considering these figures it must be 
remembered that the price levels have 
altered in all the countries. The total 
value of Indian foreign trade in 1918-19 
amounted to £282,000,000. The corres- 
ponding figures for Belgium in 1913 before 
the War, and for Canada in 1918 towards 
the end of the War, were £326,000,000 and 
£509,000,000, respectively. The popula- 
tion of Belgium in 1911 was 7,500,000 and 
of Canada 7,200,000, while India repre- 
sented no less than 315,000,000. 

During the War, while Canada increased 
her exports by 231 p er cent, and Japan 
by 232 per cent., India's export trade 


showed no advance. The official report 
makes the complacent remark that in the 
matter of foreign trade in 1918, India 
yielded pride of place to Canada. Two 
nations, both within the British Empire, 
one with a population of 315,000,000 
including the Indian States, and the other 
with less than 8,000,000, have about the 
same amount of foreign trade. While 
actively engaged in the War, Canada in- 
creased her industrial activities and output, 
whereas India made little or no progress. 

Civilized nations the world over attach 
great importance to trade as an index to 
national prosperity. The War is over, and 
the international trade competition termed 
" war after the War " has begun. It would 
be extremely suicidal if Indians failed to 
make a special effort, at this juncture, to 
take part in the industrial and trade activi- 
ties of the world. India's competition in 
the world market is not the only question 
involved. If Indian industries are not 
rapidly developed, the Indian market itself 
is in danger of being permanently captured 
by foreign nations. Increased production 


in India is necessary both in agriculture 
and in manufactures, particularly the latter, 
so that home as well as foreign trade may 
be increased. 

The so-called foreign trade of India 
outside Bombay is in the hands of British 
and foreign merchants. Very little of it 
is in the hands of the Indians them- 

The principal exports from India are 
food products and raw materials fit for 
manufactures, whereas in economically ad- 
vanced countries they chiefly consist of 
manufactured articles. Imports into India 
consist principally of manufactured articles, 
more than half of which come from Great 
Britain. The trade is largely directed 
towards the United Kingdom, 54 per cent, 
of the imports and 26 per cent, of the total 
trade in 1917-18 being with that country. 
Even assuming the continuance of the 
present system, there is always danger in 
depending too exclusively on a single 

Shipping is practically all British. The 
indigenous shipping has entirely disap- 


pearecL During the War, Indian trade 
suffered enormous losses for lack of indi- 
genous shipping. 

The exchange banks in India are all 
foreign. There is a great unsatisfied de- 
mand for branch banks and associated 
banks in the interior. The middlemen 
derive greater" benefits than the producer 
from the export of local products, because 
the trade organization of the country is 
not adapted to the producer's needs. The 
Government has no organization such as 
exists in Canada, to enable the producer to 
obtain the best value in foreign markets for 
his produce. Official reports exaggerate 
the value to the country of its foreign 
trade, since they make no distinction 
between the trade carried on by the 
indigenous population, the profits of which 
are retained in India, and that by the 
British and foreign agencies. 

The people have long been convinced 
that without political power and Govern- 
ment support, adequate progress is impos- 
sible. Substantial transfer of the control 
over the economic policy of the country 


into Indian hands is inevitable if con- 
ditions are to be improved. 

The present gold exchange system under 
which both the British sovereign and the 
" token ' ' rupee in India are unlimited tender 
is by no means satisfactory since it is 
not " automatic," but has to be " managed." 
What is required is an effective gold stan- 
dard. The Indian public should be pro- 
tected against the losses which result from 
sharp fluctuations in exchange causing 
disturbances in the business of the country. 
The present system has not shown itself 
satisfactory in this respect during the War, 
and it further entails — 

(1) Coinage of an unnecessarily expen- 

sive and yet a " token " coin, viz. 
the rupee, and 

(2) the maintenance of a sterling reserve 

in London which may be required 

once in ten or twenty years, and 

then but partially. 

A gold standard would remedy both 

these evils. If a full- weight and full- value 

standard gold coin is minted, the exchange 

may be left to take care of itself. If the 


currency is placed on a gold basis, as it 
normally is in Great Britain and every 
other economically advanced country, the 
exchange may be safely left to adjust itself 
as between any two countries. 

An effective gold standard does not 
necessarily imply the excessive circulation 
of gold coins. In Canada and the United 
States the currency is gold, but gold dollars 
are seldom seen, gold notes and gold certi- 
ficates being commonly used. In a country 
with a favourable trade balance in normal 
years, and with very large gold accumula- 
tions which an enlightened Government 
would seek to utilize, there is no question 
that the technical conditions are present 
for a successful gold currency. A central 
State bank or a federal reserve banking 
system, if established, should maintain the 
necessary reserve against the issue of 
currency notes. 

These measures would result in the 
gradual transfer of the paper currency and 
gold standard reserves amounting to over 
£90,000,000 (on March 31, 1919) from 
England to India. This amount, if held 


in India, would mean so much increase of 
credit, which would automatically help 
Indian trade. 

The large silver purchases made from 
time to time may hereafter be negotiated 
in India instead of in England. With 
the adoption of an effective gold standard, 
there will be no need to keep the " token " 
rupee, ll-12ths fine any more than the 
four-anna piece. 

A proposal for establishing an Imperial 
Bank for India by amalgamating the exist- 
ing presidency banks is at present being 
considered bv the Government of India. 
Amalgamation on the lines proposed would, 
however, be very undesirable. The present 
presidency banks may be left to do the 
banking work of the provinces in which 
they are situated ; and other provinces at 
present without such banks may be assisted 
to start new provincial private banks under 
special arrangements with their Govern- 

It would probably be safer for a large 
country like India to adoj)t the federal 
reserve banking system of the United 


States rather than the State bank system 
of France, Germany or Japan. In case 
the Imperial bank proposal is adopted, 
the Commonwealth Bank of Australia might 
serve as a satisfactory model. 

The idea of the federal reserve system 
is to avoid over-centralization of the money 
power of the country. With all the advan- 
tages of a central bank, it possesses also 
that of decentralized operation, which is 
helpful to the normal development of the 
banking facilities of all parts of the country. 
The local banks are liable to become 
merely agents of the central bank, and 
like some of the large deposit banks 
in France, they may not find it to their 
interest to promote local industries and 

The foreign-controlled presidency banks 
in India are patronized by Government, 
and apathy on the part of Government 
has very often led to the breakdown of 
indigenous banking concerns. Under a 
federal reserve system, this danger would 
be minimized. 

In future, the presidency banks, old and 


new, should not be prevented from taking 
part in foreign exchange work. 

For the foreign trade of the country, 
there should be established a separate 
exchange bank similar to the Yokohama 
Specie Bank of Japan. The present ex- 
change banks do not do for the Indian 
trader what an Indian exchange bank or 
banks should do, owing to the foreign 
ownership and European preferences shown 
by the existing banks. Branches of Indian 
banks should be established in London, 
Japan, New York and half a dozen other 
centres. Canada has several such branch 
banks in London itself, at present. 

There is room for a dozen large private 
credit banks in India, each with a paid-up 
capital of fifty lakhs or more. Capital 
for the purpose should be readily forth- 

There should be cross connections be- 
tween the State bank or banks, the indus- 
trial banks mentioned below, and the 
several credit banks, the latter acting as 
Government agents in all cases where no 
federal or provincial bank exists. It is 


necessary to encourage the formation of 
banks with large capital by granting for 
a short period at the commencement such 
Government help in the way of free audit, 
guarantee of dividends, etc., as may be 

An industrial bank should be estab- 
lished in each province, specially adapted 
to help industries, with power to issue bonds 
up to ten times the capital subscribed, as 
in Japan. The Tata Industrial Bank of 
Bombay, though not exactly of this 
character, is a beginning in this direction. 

The establishment of branch banks 
should be specially stimulated. 

The question of starting an agricultural 
bank hi each province chiefly to finance 
the co-operative credit societies is also an 
urgent matter. If cross connections are 
maintained between all classes of these 
banks, the securing of which is naturally 
a function of a State bank or banking 
system, and if proper checks are main- 
tained, a sound, comprehensive banking 
system suited to the needs of the country 
will be permanently established. 


Indian trade is further handicapped by 
the country's abject dependence upon 
foreign shipping. This subject is separ- 
ately discussed under the head of Com- 
munications in Chapter XI. 

In India the movement of goods is com- 
pletely dependent upon the currents of 
foreign trade, the internal trade merely 
registering the movement of raw materials 
one way and of manufactures the other. 
But the character of this trade will be 
different when local industries develop and 
also when all the usual local businesses 
like banks or branch banks, hotels, dairies, 
laundries and transport agencies have been 

In future, as in the case of Japan, the 
development of industries and trade, as of 
production in the districts and sub-districts, 
should be promoted by the revenue officers 
of the district with the aid of the necessary 
technical assistants and staff. To help 
them there should be semi-official advisory 
committees for each district and also for 
each sub-district. 

For inter-provincial trade, each province 


should maintain trade consuls at the moie 
important cities and ports of other pro- 
vinces, under the control of the provincial 
Boards, to be presently referred to. These 
provincial Boards should have a voice in 
the regulation of railway tariffs, hi order 
to promote internal trade. 

Once the Government is favourable — 
and no Government which has the interests 
of the people at heart can be otherwise — 
it will be easy to bring into existence all 
the necessary organizations in the way of 
Government staff and agencies, and other 
public commercial and industrial institu- 
tions and associations. It has already 
been suggested that a commission with an 
Indian majority be appointed for a period 
of five years, to introduce fiscal autonomy 
and to transform the finances of India from 
their present form, suited to a dependency, 
to a form suitable for a self-governing 
dominion. This will have to be done 
after careful inquiry into and study of 
practices gradually introduced into a self- 
governing dominion like Canada. A cen- 
tral advisory council for commerce and 


industry and an executive board of com- 
merce and industry, appointed with the 
consent of the advisory council, should be 
created to aid the member of council in 
charge of the department at the Central 
Government as well as the Minister in each 
province. Both these bodies should have 
an Indian majority. 

The Board may consist of business men 
and economic experts, not more than three 
in number, appointed at the commence- 
ment for one year only, but later on for 
two or three years, at least one fresh nomina- 
tion being made every year. The officials 
on the advisory, councils should not be 
allowed to vote. The council should be 
permitted to advise hi matters connected 
with tariffs. Indian trade commissioners 
should be appointed in five or six principal 
foreign countries with which India has 
large trade relations, in addition to the 
officer appointed in London. The officer 
working in London is naturally concerned 
in finding a market in Britain for Indian 
food-stuffs and raw materials, but his 
duties should have a wider scope, and be 


helpful to Indian merchants and manu- 
facturers. The information collected by 
the trade commissioners and others should 
be issued to the public by the Board. Ex- 
tensive propaganda should be undertaken 
by Government officers and also by private 
organizations under the direction of the 
national and provincial advisory councils 
referred to. 

A journal should be maintained by the 
Board of Commerce and Industry of each 
province to publish the information col- 
lected by the trade commissioners abroad, 
provincial trade consuls, travelling deputa- 
tions and other individuals and bodies, 
for the information and benefit of the 
people of the province. 

The Board should codify trade practices 
in civilized countries in a form easily 
intelligible to local business men. Steps 
should be taken to introduce a uniform 
system of weights and measures. 

A Chamber of Commerce representing 
indigenous trade and industry should be 
established in every province where none 
exists at present, in addition to an Associ- 


ated Chamber for all India. Every large 
city should have a Chamber of Commerce of 
its own. Every town should have a branch 
Chamber or a separate commercial associa- 
tion, an information bureau and a museum 
of agricultural and industrial products. 
The museum should exhibit corresponding 
products from advanced countries beside 
those of local manufacture, so as to stimu- 
late improvement. Many of these associa- 
tions, though voluntary, may, as in Japan, 
be incorporated under the law. 

The Board should arrange to send, with 
the aid of Government subsidies, at least 
half a dozen business men every six months 
to foreign countries to study trade and 
industry, and to transact business on their 
own account. 

The promotion of large joint stock com- 
panies and the establishment of small 
concerns for industry and trade, as ex- 
plained, should form one of the principal 
duties of the Board. Local men of proved 
organizing and directing ability should be 
given every facility and encouragement to 
start large local enterprises on the joint 


stock principle. The number of such com- 
panies started should be a test of the 
Board's own efficiency and success. 

The principal difficulty in trade, as in 
every important national activity in which 
there is international competition, and in 
which success is dependent on internal 
co-operation on a large scale, is to get a 
proper start. In order that this may be 
done, conditions favourable to the growth 
of indigenous trade should be created and 
maintained for fifteen or twenty years, until 
the people are able to get along without 
Government aid. It would then be time 
to think of free trade and open competition. 
To ask them to develop trade without 
protective tariffs or political support, while 
the trade itself is subjected to the fierce 
competition of the world, is to deny the 
people the opportunity of making a be- 
ginning at all. Government should declare 
it as their policy that trade by the people 
of the country shall be fostered by every 
means in their power, and that none of 
the expedients adopted for such purposes 
in advanced countries, or which have 


proved useful in the past in other parts 
of the world, shall be in future neglected. 
All orders and regulations providing trade 
facilities for the people should take the 
form of legal enactments or ordinances, so 
that they may have the force of law, and 
there may be no going back on them 
through change of officials. 

The provincial University should make 
abundant provision for giving instruction 
in the highest branches of technology and 
commerce. Some large cities may have 
independent colleges of their own for the 
purpose. Every district should have high 
schools giving instruction in technology 
and in commerce, to form nurseries for 
training future merchants and business 



The industries of a country reflect the 
productive capacity and executive ability 
of its inhabitants, and form one of the 
chief tests of a nation's efficiency. If a 
pump or an engine were manufactured in 
India, the people of the country would 
get exactly the machine they need, and 
would retain the money which would 
otherwise go out of the country. 

A purely agricultural country which 
maintains itself by producing only raw 
material or grain will always remain poor. 
Under present conditions in India, agri- 
culture gives a bare living, sometimes 
less than a living, to those who pursue 
that calling. Without industry and trade 
in addition, however, it is impossible for 
India or any country to keep money in 



circulation or credit easy, and to maintain 
even an average level of prosperity. Indus- 
trial activity is everywhere regarded as a 
higher species of employment, and is 
decidedly more remunerative than agri- 

Some idea may be formed of the position 
of the larger industries and business con- 
cerns in India from the paid-up capital 
of its joint stock companies, as compared 
with that of similar companies in more 
advanced countries. 

The capital invested in industrial and 
commercial concerns in the United Kingdom 
in 1914 was £2,737,000,000; in Canada, 
£390,000,000; in the United States of 
America, £4,558,000,000 ; and in Japan, 
£243,000,000. The capital of all the joint 
stock companies registered in India and 
held mainly by Indians did not exceed 
£60,000,000. The total capital of all joint 
stock companies operating in India was 
£471,000,000, the greater portion of it, 
namely, £411,000,000, being of companies 
registered in England, and presumably 
held by the people of the British Isles. 


When it is remembered that Japan has 
about one-fifth and Canada less than 
one-thirtieth of the population of British 
India, the figures here given are a striking 
illustration of the low position which India 
occupies in the industrial world. 

While in all the four countries named, 
much importance is attached to industries, 
Indians are often told that they must 
depend chiefly upon the soil for their 
livelihood. This statement is belied by 
the practices of the civilized world and the 
disastrous experience of India herself. 
Indian manufactures were at one time 
greatly prized in European and other 
foreign markets. The old methods of 
manufacture and credit have, however, 
become out of date and have gradually 
fallen into disuse, and, for lack of a policy 
of development, have not been replaced 
by new methods, except in a few centres 
in contact with the foreign population. 

At present, raw materials are exported 
to more enterprising foreign countries and 
returned to India, or exported elsewhere, 
in the shape of manufactured articles. 


For example, Japan partly uses Indian 
cotton and exports cotton goods to India 
and China ; Italy does likewise, and exports 
cotton goods to Turkey in Asia. The 
people thus suffer a double injury by the 
export of raw materials fit for local manu- 

Indians have lost their old industries 
which, though crude, gave employment to 
tens of millions of persons. They have to 
pay for foreign products from their scant 
earnings from agriculture and other primi- 
tive occupations to which a great majority 
of them are driven by necessity. 

This drain from the country is prevent- 
able. With a little special effort and co- 
operation between the Government and 
the people, it should be easy to supply 
nearly all the clothing and all the hard- 
ware and footwear and other articles 
needed locally, from India's own factories 
and looms. 

Broadly speaking, the industries of the 
country may be divided into three classes, 
namely, (1) large-scale; (2) medium-scale, 
and (3) minor. 


Industries which produce large quantities 
of products by the employment of consider- 
able capital and labour fall into the first 
category. They usually require co-opera- 
tion on a large scale, and a high order of 
technical skill and organizing ability. 

The principal large-scale industries which 

may be started, or, where they are already 

started, extended with great advantage 

to the economic interests of India, are : — 

Textiles — cotton, woollen and silk ; 

Smelting of ores — manganese, lead, 

copper, etc. ; 
Iron and steel ; 
Manufacture of machinery and other 

articles of iron and steel ; 
Shipbuilding ; 
Chemical industries — dyes, sulphuric acid, 

soda ash, artificial manures, etc. ; 
Porcelain, glass, cement ; 
Paper-pulp and paper ; 
Leather industries ; and 

In countries like Canada, Japan or 
Germany, such industries were established 
either by Government initiative or by 


active Government encouragement and 
support. In India, on account of keen 
foreign competition, such active Govern- 
ment encouragement will, in the beginning, 
be indispensable. The Government, for 
one thing, might attempt to manufacture 
its own stores, if they are not available 
in India, instead of importing from abroad. 

The large-scale industries are best carried 
on by joint-stock companies, employing a 
capital of, say, Rs. 15 lakhs or more each. 

The minor industries comprise home and 
cottage industries in cities and towns, and 
rural or subsidiary agricultural and other 
industries in towns and villages. They 
are carried on by individuals or groups of 
families in a variety of ways as regards 
provision of raw materials, capital and 
labour. It may be assumed that the 
capital employed may be anything up to 
Rs. 50,000 in each case. The products 
comprise almost every description of article 
needed in the country for which raw 
materials are available. They are manu- 
factured by various methods, in some 
cases the type of organization being indus- 


trial, in other cases, the work being carried 
on as a domestic employment. 

Between the large-scale industries em- 
ploying a capital of Rs. 15 lakhs or more, 
and the minor industries working on sums 
not usually exceeding Rs. 50,000, come a 
large variety of what may be termed 
medium-scale industries. These may be 
owned by individual proprietors, by 
partnership or by joint stock companies. 
Some of the products usually manufactured 
in ' large-scale industries ' may also be 
produced by establishments of medium- 
scale size. The cost of production in such 
a case will, however, generally be greater. 

The Government of India appointed a 
Commission in 1916 to examine and report 
upon the possibilities of industrial develop- 
ment in India. The Report has been 
before the public for some time. It con- 
tains many valuable suggestions, but they 
deal mostly with cottage and small-scale 
industries, almost ignoring the large-scale 

The Commission's most important recom- 


mendation is that the Government should 
start imperial and provincial departments 
of industries, which should be staffed with 
experts, at the commencement brought 
from outside India. The Report provides 
for imperial and provincial scientific and 
technical services and a permanent con- 
trolling staff. 

The entire scheme, it is to be feared, is 
conceived on wrong lines. The people 
require help and backing, not control and 
direction. In the expansion of industries, 
there are numerous ways in which Govern- 
ment can help or hinder, and not until 
an atmosphere of sympathy, a spirit of 
helpfulness and Indian control are estab- 
lished, will industries make any real 

The complaint has been made that the 
policy of railway management has not 
been helpful to indigenous industries ; that 
sometimes factory inspectors insist on 
costly buildings and equipment at the 
start, which make industries unprofitable ; 
and that students trained in foreign coun- 
tries receive scant encouragement. These 


and other handicaps to industrial develop- 
ment should be publicly investigated and 
the causes of complaint removed. Even 
isolated incidents of this sort are likely 
to be magnified and to cause mischief. 
They lead to loss of confidence and dis- 
hearten the people. 

The following are some of the several 
ways in which Government in India can 
render direct help : — 

Protection of any newly started industry 
for a term of six years, or till the 
industry is firmly established, by im- 
posing tariffs on imported goods. 
Inducing Indian, British and foreign 
firms to start industries, particularly 
machinery and chemical industries, 
by levying tariffs on imports, as was 
done in Japan. 
Pioneering large and difficult industries, 
including the manufacture of railway 
materials and shipbuilding, and also 
pioneering key industries. 
Granting premiums, subsidies and sub- 
ventions, or guaranteeing dividends 
to individuals or indigenous companies 



who show enterprise in starting a new 

Providing the services of experts free, or 
at special low rates, or granting sub- 
sidies for the purpose. 

Affording special railway facilities. 

Taking an industrial census periodically, 
as required, and publishing statistics. 

In most successful countries, the scienti- 
fic use of tariffs has been a most powerful 
factor in building up modern industries. 

The Provincial Governments may make a 
start by pioneering some of the larger 
industries like shipbuilding, machinery, 
engines, motor transport, chemicals, paper, 
etc., and also some of the many key indus- 
tries needed, with the object of making 
them a success and subsequently trans- 
ferring them to the people. There are few 
technical secrets that are not readily 
available, or that cannot be secured by 
the expenditure of money. 

For the rapid growth of industries, it 
is first necessary to create an atmosphere 
of business confidence and a continuity 
of policy and operations. The development 


work should be under the advice and 
control of the leaders of the people closely 
interested in the work, and represented by 
the suggested Advisory Council and Board. 
Government should definitely announce its 
policy of support and encouragement of 
industries, which should be ensured by 
law, as in Japan. 

The principal requirements are organizing 
ability, labour, expert skill, capital, machin- 
ery, raw materials and efficient works man- 
agement. The raw material is available in 
abundance. For lack of local use it 
is being exported to foreign countries. 
The supply of labour is abundant and 
although in the past there has been a 
lack of policy for training it, the necessary 
training could be given in five to ten years. 
Machinery can be purchased from the best 
makers if capital is available. Capital 
will be readily forthcoming if its utilization 
for the benefit of local industries and 
enterprise is assured. There will be no 
necessity to borrow foreign capital at the 
beginning, although there should be no 
hesitation in doing so if the rapid growth of 


industries warrants such a step. Experts 
should be obtained from wherever they 
can be secured, and given fees and bonuses, 
usually in the shape of a moderate monthly 
salaty and payment by results. Some 
industries may also be advantageously 
started in co-operation with English and 
foreign firms. 

There will be no dearth of suitable 
organizers and directors if expert assistance 
and reasonable financial accommodation 
are assured. Although college trained men 
are in charge of the various departments 
of industries in Japan, the control of the 
organizations themselves is in the hands 
of the older class of business men who 
have shown themselves competent to 
manage these concerns. If it becomes 
the settled policy of Government to en- 
courage industrial development, there are 
many capable merchants and business 
men of this type among the Indian popu- 
lation who will come forward to take 
advantage of the opportunities thus 
afforded. As in Japan, a supply of techni- 
cal and business graduates should be 


ensured by starting colleges and institutes 
without delay. If the industrial develop- 
ment is to succeed the experts and officials 
employed should be on a temporary tenure 
and paid by results. The temporary ex- 
penditure will be heavj^ but rigid official 
control and resulting stagnation will be 

Reference has been made to the indus- 
trial banks needed in the country for 
financing factory and oth< r large industries. 
The cash-credit system should be introduced 
for the benefit of the small industrialist, 
while co-operative credit is necessary every- 

If industrial development is carried on 
by agreement in spirit and principle between 
the Government and the people, savings 
which now are hoarded may be mobilized 
for financing industries by opening branch 
banks all over the country. Also by 
special propaganda, people could be in- 
duced to invest, in productive undertakings, 
much of the unproductive wealth now 
retained in the shape of jewellery and 
ornaments in numerous small hoards. 


The formation of joint-stock companies 
for promoting industries requires special 
encouragement. The law should be exam- 
ined in the light of the latest developments 
in foreign countries, particularly in Japan, 
with a view to adapting it more closely 
to the local requirements of each province. 
People will require advice in company 
flotation. This duty should not be left 
to company promoters or underwriters. 
The provincial advisory council of commerce 
and industry should have the work under 
its special care for some time, semi-official 
committees with an expert staff being 
formed over suitable areas, to advise 
intending investors and company promoters. 
The German system under which the banker 
advises his customer, might also be tried 
in places. Provincial statistics of the 
progress of company notation should be 
published at least once a month, so that 
every one interested might watch progress 
and assist in removing obstacles and pro- 
viding the necessary help. 

Research institutes should be established 
on the model of the one at Teddington in 


England, or the Bureau of Standards at 
Washington. One such institute will be 
needed for each province to work in close 
association with the University and higher 
technical schools. 

Industrial experimental stations like 
those in Japan, intended for carrying out 
experiments in manufactures, should be 
established in every important city and 
smaller ones in each district, to work in 
conjunction with the research institutes. 
These should be maintained at the expense 
of the State, but should be kept under 
the administrative control of committees 
of local business men and experts. Their 
primary object will be to stimulate experi- 
ments and improvements in methods of 
manufacture, including the testing of pro- 
cesses followed in the various countries. 
There can be no doubt that such industrial 
experimental stations are destined to play 
a great part in India's regeneration. 

Industrial museums should be located 
in every important city, and business 
inquiry offices in every city and town, to 
keep in close touch with the experimental 


stations, research institutes, etc., and 
obtain up-to-date information and advice 
for local business men engaged in industries 
and manufactures. 

There should be at least one technical 
college in each province to teach experi- 
mental sciences and industrial chemistry 
up to the highest standards. Higher techni- 
cal schools should be established at the 
head- quarters of each district. Experi- 
mental workshops and school laboratories 
should be associated with them. Short 
industrial courses should be available for 
the population of the smaller towns and 
villages whenever they have leisure to 
profit by them, particularly in the more 
extended use of mechanical appliances and 

Had such experimental stations and 
educational institutions been started in 
India thirty years ago, she would have 
made as great an industrial advance as 
Japan, or perhaps even greater, in view 
of the enormous resources of both men and 
raw materials at her disposal. 

Correct statistics of industries in every 


district and province should be collected 
and published for the use of the people 
of the area. They should give all the 
information and data supplied by in- 
dustrially advanced countries and they 
should show clearly the precise share of 
the indigenous population in every class 
of enterprise. The corning census should 
be fully utilized for this purpose. Both 
Government and public organizations 
should collect and make available to the 
people information from foreign countries 
likely to be of value for developing local 
industries. The industrial progress of each 
district, province, city, town and village 
should be reviewed by the local authorities 
concerned at least once every vear. 

There is no doubt that India's productive 
power can be enormously increased by 
industries. With money, determination 
and popular control in a centralized form, 
and Government help of the character 
given in Japan, practically any large 
industry for which raw materials are 
available can be successfully started in 
India at the present time. 


The present opportunity is extremely 
favourable for starting industries. As time 
goes on, competition will grow keener and 
conditions will become less favourable. 
To make a satisfactory start, a special 
effort will be necessary. Large beginnings 
are not made by routine methods. Govern- 
ment has to raise a loan to establish 
the necessary research and educational 
institutions, and also to advance loans, 
on special terms, to industrial and other 
banks, to finance industries. The money 
allotted to each province should be utilized 
under the direction of the advisory council 
referred to. The provincial share of the 
loan may be raised locally in the province 
concerned, and, if administered in the 
manner suggested, it will certainly be 
readily forthcoming. 

The work for each province should 
proceed according to a well-considered 
programme, approved by the local Legis- 
lative Council. The necessary staff should 
be maintained from the current revenues 
of the province. It may confidently be 
expected that the programme will begin 


to yield definite results in five to ten years 
from the time work is started. In advanced 
countries, where every avenue of develop- 
ment is already exploited, returns from 
new enterprises may be slow, but in a 
new field like India, and with abundance 
of cheap labour, industrial activity, when 
a favourable atmosphere is created, is 
bound to grow at a rapid pace. The 
money spent in inaugurating a policy of 
development will come back to the people 
and the Government, multiplied a hundred- 

It is necessary once again to emphasize the 
statement that this outstanding problem 
of industry is a matter which con- 
cerns the Indian population. If bureau- 
cracy prevails in this department of the 
country's activity, industries will not 
prosper. There is no necessity for an 
Imperial department of industries. A pro- 
vincial department of industries under 
Indian control should be maintained. One 
indispensable duty expected of the Imperial 
Government is to see that the provincial 
departments are supplied with funds, that 


adequate encouragement is given, and that 
no federal or international restrictions exist 
to handicap or disable local enterprise. The 
self-interest of the people and the public 
spirit of the province will do the rest. As was 
remarked by a leading London Conserva- 
tive daily in May, 1920, in referring to the 
post-war policy of Government in relation 
to industries in the United Kingdom, 
" You may have either nourishing industries, 
or a flourishing bureaucracy, but never 



If all the Indian States are included, as in 
an economic survey they should be, with 
British India, the total acreage under 
cultivation in India is larger than that of 
any single region of the world, with the 
possible exception of China and the United 
States. The estimated value at pre-war 
rates of the annual production from both 
dry and irrigated crops may be put down 
at a little under £400,000,000. This gives 
an average income of Rs. 33 (£2 45.) per 
head for the agricultural population, and 
of about Rs. 24 (£1 12s.) per head for the 
entire population of British India. 

Compare the Indian conditions with 
those of Japan, where agriculture is ex- 
tremely careful and thorough. 

It may be of interest to mention in this 



connection that agriculture is carried on in 
that country very intensively, almost like 
gardening. Rice seedlings are sown at 
exact distances apart, measured by a 
wooden scale. In some of the model 
villages, the Young Men's Associations 
carry on experiments themselves, under 
general advice from the officials. 

Japan, although not entirely self-sufficing 
in the matter of food, maintains normally 
a population of 56,000,000 on a cultivated 
area of 17,000,000 acres ; that is to say, 
one-third of an acre per head as against 
India's five-sixths of an acre. On the 
normal, pre-war basis, the average produc- 
tion of British India, including irrigated 
crops, cannot be more than Rs. 25 per 
acre ; in Japan it cannot be less than Rs. 

The smallness. of the Indian jdeld is due 
to a variety of causes, some natural, others 
avoidable. First comes the rainfall, which, 
except in Bengal and Burma, is often 
uncertain. Apart from the relatively small 
area covered by modern canals, irrigation 
is restricted to the ancient and arduous 


method of depending upon tanks and wells. 
A second cause is the persistence of con- 
servative habits of tillage. Scientific agri- 
culture is almost unheard of, and little 
practised where known. The ryot is ex- 
tremely simple-minded, and lives in an 
atmosphere of superstition and tradition. 
And yet, as many authorities have recog- 
nized, he is not altogether disinclined to 
adopt new ways, provided their value is 
clearly demonstrated. 

The Indian peasant is not essentially 
different from his fellow in other lands. A 
little experience would show that he is not 
lacking in readiness of response — response 
which would be proportionate to the 
accessibility and practicable character of 
the opportunities provided, and to the 
sincerity and humanity of the people 
directing the work of instruction and 
experiment. As agricultural schools and 
scientific farms are established, continuous 
effort will have to be made to create a real 
relationship between the institutions and 
the agriculturist. 

Hitherto, the Indian peasant has been 


practically untouched by the feeble and 
academic attempts at agricultural education, 
which are all that have been made by the 
authorities. A few central experimental 
farms and a number of district farms have 
been working for several years past ; but 
it cannot be said that they have influenced 
the general situation in any material degree. 
They are controlled by Government officials, 
between whom and the cultivator there is 
and can be no sympathetic understanding. 
The policy of agricultural development is 
controlled, not by experts, but by members 
of the bureaucracy, who obviously cannot, 
in the midst of their multitudinous execu- 
tive duties, keep abreast of the achieve- 
ments of scientific agriculture in the West. 
Knowledge, therefore, is lacking, and the 
technique of modern cultivation is 
undeveloped. It is no wonder, in these 
circumstances, that farm operations are 
conducted for the most part b}^ primitive 
methods, and that the results, judged by 
the volume of production, should be dis- 
tressingly low. 

All development being traditionally 


associated with bureaucratic initiative and 
control, capital is shy, and does not flow into 
agricultural industry ; and it is perfectly 
plain that until both policy and spirit are 
radically altered, it will not do so. Local 
conditions everywhere, coupled with the 
prevailing ignorance and apathy, make it 
impossible for bodies of cultivators to 
combine, as in Russia, Japan, or Western 
Europe, to promote better farming and 
better business. The absence of market 
organization in conjunction with other 
causes prevents the cultivator from reaping 
a full reward from his labour. The middle- 
man is also the money-lender, and it is he 
who profits most. The ryot, in conse- 
quence, has very little incentive to activity 
or improvement. 

The moral, surely, is obvious. The vast 
rural problems affecting the welfare of 
325,000,000 cannot be handled, cannot 
even be approached, without special apti- 
tude or training, by a small body of officials 
encumbered by heavy routine duties, and 
subject to the rigid habits and prejudices 
of a hierarchy, embodying, in its clearest 



form, the principle of imperial ascendancy. 
The remedy lies in a great and combined 
progressive movement, including the reform 
of the official system and the remodelling 
of Government departments of agriculture. 
The natural leaders of the people, including 
prominent agriculturists, should be placed 
in a position to improve agricultural condi- 
tions with the aid of expert assistance, by 
their own forethought, preparation, and 
combined effort. 

Manifestly, the central aim of all practical 
measures must be the increase of the yield 
per acre and the systematic improvement 
of the product. The most urgent measures 
needed to lift agriculture from its low level 
fall under three main heads : — 

(1) Provision for the farmer's immediate 


(2) Large measures of permanent im- 


(3) Development of the dynamic forces 

of rural life. 
Under the first head would come such 
essential necessities as : temporary loans ; 
facilities for procuring draught cattle, good 


seed, fertilizers and implements ; and 
instruction in the technique of cultivation 
and the principles and methods of co-opera- 
tive effort. 

It is desirable at once to establish a 
large number of seed depots in connection 
with experimental farms. The supply of 
chemical manures, especially where irriga- 
tion facilities exist, may easily be made 
highly profitable. Such fertilizers should, 
as in Canada, be used as far as possible to 
supplement farm manures, rather than as 
substitutes for them. 

The existing Indian breeds of cattle need 
improvement, especially for draught pur- 
poses. Attention should be given to scien- 
tific questions relating to stock breeding 
and fodder supply. 

As to modern implements, while it is 
true that the Indian farmer needs to be 
educated in regard to their use, the chief 
obstacle to progress is the economic in- 
ability of the peasant to purchase them. The 
rapid industrial expansion of India in 
future, however, will make it easily possible 
immediately to establish local manufacture 


on a large scale, so that, given reasonable 
loan facilities, every cultivator of moderate 
means might possess or have the use of 
up-to-date ploughs, pumps and larger agri- 
cultural implements, while much might be 
done to encourage the use of hand-carts and 
simple labour-saving devices. 

Among the larger measures of a permanent 
character, the first and foremost needed is 
the establishment of agricultural societies. 
The success of the individual cultivator 
now-a-days depends not on himself alone, 
but on the help and co-operation he may 
receive from fellow-farmers and leaders, or 
in other words, on the co-operative effort 
of the whole locality. Agricultural societies 
should be established by law, as in Japan, so 
that the provisions and their execution 
would not be dependent on the arbitrary 
will of the officials, but would be binding 
both on the officials and the rural popula- 

In Japan, every district, indeed almost 
every village, has its agricultural societ}^ 
the scheme, in its national aspect, being a 
remarkable example of co-ordination. At 


the head is the Imperial Agricultural 
Society ; below that the prefectural or 
district society ; next the county or city 
society ; and at the base the small town or 
village society. All are subsidized by 
Government or local funds. The town and 
village societies consist wholly of persons 
actually engaged in agriculture. Altogether, 
there are some 11,000 such societies in the 

Associated with the agricultural societies 
are guilds and other public bodies 
established by law for the purpose of 
increasing the quantity and quality of 
staple products — tea, silk, live stock, etc. — 
while in various parts of the country 
private organizations for similar objects 
are maintained by groups of enthusiastic 
people. They all share in the common 
stimulus of a great movement, and at 
intervals meet in conferences to discuss 
methods, to compare results, and for the 
mutual sharpening of minds and purposes. 

A few well-managed experimental agri- 
cultural farms and schools exist in some of 
the provinces in India. To bring them 


into touch with the peasants, they should be 
under the control of committees composed 
of experts and the leading representatives 
of the people engaged or interested in 
agriculture in the rural areas concerned. 

An agricultural farm, assisted by Govern- 
ment funds, should be established in every 
sub-district and every important village 
where people desire to have such an 
institution. These farms, and the labora- 
tories attached to the agricultural colleges, 
should provide facilities for carrying on 
specific research work to obtain estimates 
of yield as a result of the various special 
methods and appliances utilized. Short 
courses in economy should be conducted in 
the experimental farms during the seasons 
of the year when farming operations are 
not brisk. 

Clearly the main necessity is to gather 
into the agricultural schools as many 
people as possible for instruction in the 
rudiments of scientific agriculture, while 
the more enterprising farmers should be 
encouraged to go through the general 
farmers' 1 course, at the institutes and 


experimental farms. The curriculum of 
the schools should comprise such objects as 
soils, seeds, live stock, home economics, 
elementary business principles and account- 
ancy, while provision should be made, for 
the reasons dealt with above, for training 
in subsidiary occupations. The best way, 
indeed the only way, by which science can 
be made to appeal to the rural mind is 
through the medium of common experience 
and practical results. Hence, the farmer 
should be encouraged not only constantly 
to seek to improve his own knowledge, but 
to take advantage of opportunities for 
having his womenfolk instructed in the 
household crafts. 

The cultivator should receive training in 
husbandry by observing the work on well- 
managed farms. Instruction in scientific 
agriculture should be imparted both on the 
farms and in agricultural schools. The 
highest form of agricultural education 
should be imparted in the university, 
where the specialists, research workers, 
expert farm managers and leaders capable 
of formulating an agricultural policy and 


introducing new and profitable methods of 
cultivation will be trained. A secondary- 
grade education will be required to equip 
a class of intermediaries to carry out the 
plans of the leaders and interpret them to 
the peasants. A class of agricultural engi- 
neers or maistries is urgently required to 
work as lecturers and instructors, to form 
a link between the experimental stations 
and the agricultural societies or the actual 
farmers themselves. 

Special institutions, where needed, should 
also be provided for carrying on experiments 
in sericulture, in cattle, sheep and horse 
breeding, and other agricultural pursuits. 
A staff of inspectors and lecturers should 
be employed in each district associated 
with the district farms, to help the agri- 
cultural societies and through them, the 
cultivators, by demonstrations, discourses 
and propaganda work generally. 

During the past half-century, agricultural 
indebtedness in India has grown markedly 
through various causes. Among them are 
the pressure of the people on the land ; 
partitioning and re-partitioning into un- 


economic holdings ; the Contract Act of 
1872, which transformed the old human 
relations between the money-lender (sowcar, 
baniya or mahajan) and the ryot into the 
legal relation of debtor and creditor ; the 
date of the land revenue collection which 
compels the ryot to borrow before he can 
realize his harvest at the best market 
rates ; the use made of the money-lender 
as dealer by agents of the great foreign 
firms ; absence of a communal market 
system ; the decay of village arts and 

Beyond question, the initial steps towards 
dealing with the vast problem of rural 
indebtedness should be the wide extension 
of co-operative credit, and the gradual 
transformation of the existing system by 
the adaptation of methods proved valuable 
in countries like Russia, Denmark and 
Ireland. In Government reports of the 
past decade, the growth of co-operative 
credit has made a brave show year by 
year, but all that has so far been done 
amounts only to a scratching of the surface. 
The societies now existing fall into four 


classes : (1) credit, (2) purchase, (3) sale 
and (4) production. The great majority, 
however, are credit societies, and these need 
to be remodelled and greatly expanded 
before we can hope to see in India anything 
corresponding with the movement that 
forms so hopeful a feature of agricultural 
life in Japan — the effective co-ordination of 
the various kinds of agricultural societies 
for the constant vitalizing of the rural 

A central agricultural bank like the 
Hypothec Bank of Japan is needed to 
subsidize co-operative societies and supply 
the capital required for developing agri- 
culture. The district banks started with 
local money and enterprise may receive 
help from the central bank similar to the 
help afforded by the Japanese Hypothec 
Bank. A properly co-ordinated network 
of such banks will help to mobilize all 
available capital and largely diminish the 
tendency towards hoarding. 

The farmer has much need of subsidiary 
occupations in India. As the agricultural 
holdings are small, and the rainfall is 


limited to four or five months in the year, 
he is fully employed only for about six 
months out of twelve. After an unsatis- 
factory monsoon, large numbers suffer 
from unemployment, and in times of 
famine, the entire body of agriculturists 
go without work. It is a question of life 
and death to the people that there should 
be a diversity of occupations in rural areas. 

The occupations usually practised are 
fruit and dairy farming, sericulture, weav- 
ing, rearing cattle, pigs and poultry, pre- 
paring ghee, vegetables, etc., for the market. 
Multitudes of artisans employed as car- 
penters, masons, smiths, 1 " barbers, washer- 
men, etc., follow agriculture as a subsidiary 
profession. There are numerous small and 
home industries practisedin Japan which 
may be introduced into rural areas in 
India. In the neighbourhood of forests, 
forest industries should be encouraged, and 
near the sea-board and lakes, fishing. 

Provision should be made for instructing 
children in these and other suitable rural 
industries ; capital should be provided by 
co-operative effort, and by Government 


loans where necessary. The question of 
market organization should receive special 

The new department of industries might 
organize a plan of operations, by which the 
subsidiary industries of an area may be 
assured of all reasonable co-operation with 
financial help and encouragement from the 
local authorities and public associations. 

The subject of irrigation will be separately 
dealt with, in the next chapter, under the 
head of development of natural resources 
and communications. 

Hitherto, the science of statistics has 
been, for the cultivator, either a matter 
altogether outside his range, or another 
means of vexation devised by Government 
officials. This ought not to be the case. 
Agricultural progress is not possible in the 
modern world without statistics, and it is 
clear that increasing importance will be 
attached to the collection and use of facts 
and figures relating to production, including 
those of subsidiary occupations. The vil- 
lage group should be taken as a unit, and 
statistics of the entire province should be 


so compiled as to be easily intelligible to 
the ordinary literate cultivator. The results 
should be made accessible in all localities 
for study and reference, and comparisons 
instituted with- reference to other provinces 
and foreign countries. Rightly treated, 
the collection of facts may itself be a means 
of communal effort and education. 

The statistics should reflect the general 
condition of the cultivator, the area of 
his holding, the number of draught and 
milch cattle in his possession, the amount 
of capital (tools, implements and other 
property) possessed by him, the area of 
his indebtedness, the total production of 
the farm, his income from subsidiary occu- 
pations, the number of working members of 
the family, etc. A frequent census should 
be taken of production, so as to include all 
these particulars. 

The usual criticism levelled against the 
Indian is that he is a creature of the day, 
or the season ; that he lives from hand to 
mouth. The plain fact is that harsh cir- 
cumstance forces him to do so. Merely 
to keep alive is a problem for him. He 


cannot give thought to the necessity of 
preparing in advance for probable bad 
seasons. Long ago, no doubt, under the 
ancient village constitution, a year's sus- 
tenance could be stored against famine ; 
but the growth of the modern system of 
administration has made such expedients 
impossible. To-day, agricultural India 
suffers from overpowering inertia. Before 
a new order can be introduced into the 
villages, the spirit of hope and enterprise 
must replace the prevalent apathy and 

The first practical step is to enable 
Indians in increasing numbers to see for 
themselves what science is doing to imj^rove 
agriculture throughout the world. Parties 
of representative men, from every province, 
should be encouraged to travel abroad, 
especially to Japan. These parties should 
include not only men of wealth and high 
position, but also, as a matter of course, 
teachers, farmers, members of the provin- 
cial services, and graduates of agricultural 
colleges. The information and specimens 
brought back by them should be made use 


of for local exhibitions, and they should be 
required to disseminate knowledge acquired 
by them while travelling abroad, through 
every available channel. 

It must, however, be emphasized that 
nothing can be done until the local adminis- 
tration becomes thoroughly imbued with 
a new spirit. Every opportunity must be 
given to people of village, taluk, or district, 
to co-operate with one another to carry 
out works of public improvement, such as 
making and repairing roads and bridges, 
constructing irrigation tanks and channels, 
improving sanitation and the like. The 
present conditions of local administration 
make it impossible for the cultivators to 
co-operate in the performance of such 
needful services. The people, cut off as 
they are from responsibility and self-help, 
are, to all intents and purposes, dead. 
The only thing that can save the Indian 
body politic from dissolution is the trans- 
fusion of new life into the system of govern- 
ance by the gradual devolution of authority. 
India has abundant resources in the shape 
of capital, labour and natural directive 


talent, but at present they are locked up. 

District farm bureaux have been started 
and turned to admirable use in various 
Western countries during recent years. 
In the United States, for example, over a 
million farmers are organized through such 
bureaux, and are thereby enabled to 
grapple co-operatively with local problems. 
In some States, wherever one-fifth of the 
farmers in a county wish for a farm 
bureau, the administration provides an 
adviser and staff, and makes an annual 
grant. A close connection exists between 
the farm bureaux and the agricultural 
colleges, now nourishing in every State. 
By such means constant intercourse and 
stimulus are provided for the whole agri- 
cultural community. 

In India, the first necessity is to create 
an atmosphere of confidence and co-opera- 
tion. That done, there can be no doubt 
of the growth of a movement of multiple 
improvement, which, we may assume, 
would express itself in common effort for 
insurance against famine. Each family 
will be able to lay by a little store of 


grain ; co-operative granaries will spring 
up ; the wasteful use of cow-dung as fuel 
will be checked ; plantations for the supply 
of fuel will be started; labour-saving 
appliances will come into use, and subsidiary 
occupations will multiply. The cultivator 
will rapidly become conscious of the pro- 
gress that is being effected. He will 
provide himself with footwear, and with a 
more adequate protection from the tropical 
sun than the piece of cotton cloth in which 
his head is now wrapped. He will eat his 
food not from leaves or earthen vessels, 
but from plates of porcelain, brass, or 
copper. As the results of modern know- 
ledge are gradually unfolded before him, 
he will realize that the bonds of necessity 
are breaking, and that he need no longer go 
on with his hopeless daily labour, content, 
like his ancestors, to scratch the surface of 
the earth merely to keep life in his body. 
The Government should have pro- 
grammes for increasing production and 
agricultural development generally prepared 
for every district and sub-district, and 
should maintain statistics of production, 


review progress, and issue an annual report 
for the district, showing to what extent the 
cultivators have been helped by the institu- 
tions and organizations created for their 
benefit, and with what result. 

While agriculture cannot bring wealth 
to India on a great scale, if the measures 
here sketched be taken up, the production 
of the country might, on a moderate 
estimate, be doubled within fifteen years 
or even less. The extension of cultivation, 
increased irrigation, rotation of crops, 
intensive cultivation with the fullest use 
of fertilizers, and improvement in stock- 
breeding are all urgently needed. The 
most speedy way of promoting these ends 
is to give leadership and financial support 
to the agriculturist, while all the while 
encouraging him to feel that he is the 
master of his own business, and that the 
officials connected with agricultural in- 
struction and administration are there 
merely to counsel and assist him. When, 
in the years to come, the Indian people 
travel more freely, when both general and 
special education comes to be more 


widely spread, the idea of conscious 
and systematic development will take firm 
root in the country. 

On this subject one more observation 
remains. The suggestion of village unions 
or grouping of villages already recommended 
in the chapter on Local Self-Government, 
if immediately adopted, will introduce 
order and a spirit of development into 
rural areas, and will, we may confidently 
expect, be the speediest means of 
rehabilitating the communal life of the 
Indian countryside. 



Irrigation works are of vital importance 
in a tropical country like India, where 
there are tracts in which not a blade of 
grass can grow on unirrigated soil. The 
total irrigated area of British India is 
about 48,000,000 acres, or 21 per cent, of 
the total net cropped area of 230,000,000 
acres, of which 26,000,000 are watered by 
canals built by the State, and the remaining 
22,000,000 by tanks and wells constructed 
by private agency. About 6,000,000 acres 
of land in the Indian States are also irrigated. 
The total outlay on the State irrigation 
works for which capital accounts are kept, 
amounts to Rs. 730,000,000, and the 
value of crops raised on such areas to 
Rs. 970,000,000. The larger works, classed 



as productive, gave a return of 8*1 percent. 
in 1918-19. Thus, for every Rs. 100 spent 
on capital irrigation works, the country 
obtains, making allowance for temporary 
high prices, a gross produce of Rs. 100 or 
more annually, a fact which should com- 
mend this class of works to public favour. 

The irrigation policy at present followed 
in India is based upon the recommendations 
of an Indian Irrigation Commission, which 
sat between 1901-03, during Lord Curzon's 
Viceroyalty. That Commission estimated 
that 12J per cent, of the total rainfall was 
utilized in artificial irrigation of all kinds 
in India. The annual surface flow of the 
river basins of India, excluding Burma, 
Assam and Eastern Bengal, amounted, 
according to the Commission, to 51,000,000 
cubic feet, of which only 6,750,000 cubic 
feet were actually utilized in irrigation. 
The balance passed to waste in the sea. 
Reservoirs, tanks and canals must be 
constructed to utilize some of this waste 
water with profit to the people and to the 

In future annual reports the permanent 


policy and plans in respect of each province 
should be briefly stated, and forecasts of 
projected irrigation works published for 
the information of the public. 

The rapid development of industries and 
transportation, and the supply of power and 
light for cities and towns, largely depends 
upon cheap fuel. Of the 120,000,000 horse- 
power used in the various countries of the 
world for all purposes — railways, factories, 
shipping, etc. — 75,000,000 horse-power is 
used in factories and for municipal activities, 
13,000,000 horse-power being thus used 
in the United Kingdom alone. Canada has 
already developed roughly 2,300,000 horse- 
power from her water-power resources, which 
potentially amount to nearly 20,000,000 

Under the orders of the Government of 
India, the " white-coal ' or water-power 
resources of the Indian continent were 
recently surveyed. The preliminary report 
which has been issued gives some details. 

At a rough estimate, the total power 
supplied in India is put down at less than 


1,200,000 horse-power. Of this, 285,000 
is electric horse-power, of which only 
36 per cent, is obtained from water-power. 
As all the rainfall is precipitated in four or 
five months of the year, storage reservoirs 
are necessary to obtain a continuous flow 
for power generation throughout the year. 
The Cauvery Power Works in Mysore 
and the Tata scheme in Bombay are the 
pioneer hydro-electric works in India. Both 
are undergoing development. In future the 
Government and the people should actively 
interest themselves and co-operate in 
developing this branch of power supply, for 
which there is a growing demand. 

Though the total forest area of British 
India is nearly 250,000 square miles, the 
total net revenue derived from forest 
products was only a little over £1,000,000 
in 1918-19. The public has little informa- 
tion about the work of this department. 
It is, therefore, impossible to make a 
dogmatic statement in regard to India's 
potentialities in this respect. There can 
be no doubt, however, that better com- 


mercial use can be made of the forests with 
a view to providing materials for industries 
and increasing the revenue. 

The Indian forests are, at present, utilized 
to a small extent to supply timber for 
building purposes, fuel for domestic use, 
wood for paper-pulp, and minor produce of 
various kinds. It has yet to be officially 
recognized that a forest is a crop, and not a 
mine which can be left undeveloped in- 
definitely, and that wood will rot unless 
cut and removed at the proper intervals. 

Land should be given, on favourable 
terms, for private plantations, with a view 
to encouraging the people to grow trees of 
economic value. Permanent plots should 
be established to experiment with pulp 
woods. Companies for the manufacture 
of paper, where necessary in co-operation 
with British manufacturers, should be 
started in the vicinity of large forests. As in 
Canada, Government should endeavour to 
build up forest industries and establish 
more forest schools. 

Local provincial and district committees 
should be associated with the officials in 


charge of the forests, so that the people 
may closely follow the work that is being 
done, and assist in building up this important 
State property. Such committees should 
also draw public attention to the possi- 
bilities of particular forest industries such 
as paper, matches, pencils, furniture, etc. 
Reliable estimates of the value of forest 
products in each area should be maintained 
from year to year, and published periodically 
for the information of the local population. 

The old mining and mineral industries 
have died out in India, and the people of 
the soil are very inadequately associated 
with the modern mining industries started 
in the country. According to the Indian 
Year Book for 1919, the modern develop- 
ments in Europe have " helped to stamp 
out in all but remote localities, the once 
nourishing manufactures of alum, the 
various alkaline compounds, blue vitriol, 
copperas, copper, lead, steel and iron, and 
seriously curtailed the export trade in 
nitre and borax." 

The gross value of mineral production in 


1917 was £13,500,000— exceedingly small 
for so large a country as India, and possessed 
of such vast resources. The corresponding 
production in Canada in the year 1917 was 
£40,000,000 ; in Japan, £44,000,000 ; and in 
the United States of America, £430,000,000. 

The principal minerals produced in 
India in 1917 were coal to the value of 
£4,500,000 ; gold, £2,300,000 ; manganese 
ore, £1,500,000 ; petroleum, £1,100,000 ; 
and salt, £900,000. Most of these industries 
are in non-Indian hands. 

Neither the Government nor the leaders 
have made any attempt to prepare the 
public to engage in mining work. The 
information relating to geological surveys is 
not published in a form that is intelligible 
to the lay public or calculated to stimulate 
indigenous enterprise in mining. 

India's mines should be nationalized as 
regards ownership, though they may be 
worked by companies, or individuals. Each 
provincial Government should be free to 
deal with the local minerals in the interests 
of the people of that province. 

It may be mentioned that the Japanese 


Government at first undertook to work some 
of the principal mines in Japan as models, 
employing foreign mining engineers and 
geological experts for the purpose. The 
mines were, however, transferred to private 
ownership as soon as they began to be 

Colleges and Schools of Mining and 
Metallurgy are needed for training alike in 
the highest scientific branches and in 
practical work. At least two colleges giving 
the highest instruction obtainable should be 
started at once. Also a number of schools 
in the existing mining centres. There 
should be a recognized co-ordinated scheme 
of such instruction for all India. 

An advisory committee should be associ- 
ated with the bureau or department of 
mines in each province. As in Canada, 
under similar circumstances, the Central 
Government may confine its attention to 
scientific investigations and to the collection 
of information from foreign countries for 
dissemination among the people. Pamphlets 
embodying reliable information regarding 
local resources, together with advice and 


instruction for exploitation, both in English 
and in the vernacular, should be issued 
by the provincial geological departments 
from time to time. The question should 
be considered whether the provincial 
Governments should not undertake the 
establishment of smelting furnaces, rather 
than let ores be exported in their crude 
state. Canada is doing this as regards 
copper, and Australia as regards spelter. 

India's natural resources have never been 
thoroughly surveyed. It is, therefore, 
difficult to estimate her potentiality. A 
special commission should be appointed to 
undertake this task. 

Among industrial possibilities to be sur- 
veyed may be mentioned the manufacture 
of salt, the development of fisheries, the 
preservation of game, etc. There is no 
reason why all the salt needed should 
not be manufactured in the country 

Fisheries at one time received some 
attention in Madras, but no large measures 
have been put into operation and no 
schools established with a view to increasing 


from that source the food supply of the 

On account of high mountain barriers on 
the north, north-west and north-east, India, 
so far as foreign communications are con- 
cerned, is practically an island. Civilized 
life cannot be maintained without more 
intimate association with foreign lands. 
The total tonnage of shipping entered and 
cleared in India amounted to 17,000,000 
tons in 1913-14, and less than 11,000,000 
tons in 1917-18. In Canada the total 
tonnage entered and cleared in 1917-18 
was 29,000,000 tons. In the single port 
of Detroit, situated upon the shore of an 
inland lake in the United States which is 
ice-bound for four or five months in the 
year, the tonnage entered and cleared 
amounted to over 100,000,000 tons in 1916. 
Considering that India has a coast-line 
4,500 miles long, her shipping facilities are 
utterly inadequate for the trade of the 
country. There are only six or seven 
developed harbours in the whole country. 
The shipping is, moreover, all foreign. 


Even foreign-built ships " registered " 
in India form a paltry one or two per cent, of 
the total tonnage employed in the foreign 
and coastwise trade of the country. Indian 
construction is required as well as Indian 

In the middle of the last century there 
were 34,000 Indian-owned vessels with an 
aggregate tonnage of 1,250,000. Towards 
1900, these had dwindled to a tonnage of 
a little over 100,000. During the War, a 
few small vessels were constructed, presum- 
ably for use in Mesopotamia, but it is 
safe to say that for all practical purposes 
there is to-day no Indian-owned shipping. 

It is necessary in the interests of the 
country for the Government in India to 
start building ships on its own account. It 
should be able to build ships in its own 
yard for the Royal Indian Marine. Even 
if nothing more could be done than to 
assemble parts in India, the industry would 
give profitable employment to a large 
number of people. 

Australia has purchased all private ships, 
started shipbuilding yards, and nationalized 


the whole industry, including the working. 

In Japan the State took the initiative in 
shipbuilding and iron and steel manufacture, 
although raw materials for these two in- 
dustries were not so easily procurable in 
Japan as they are in India. 

In Canada and the United States, as 
already stated, shipbuilding is going on at 
a rapid rate under Government auspices. 
At present, both America and Japan are 
trying to carry on all their trade with India 
in their own bottoms, as the Germans and 
Austrians tried hard to do in pre-war years. 

The provincial Governments should, 
according to circumstances, be able to 
spend specific sums of money every year on 
the construction and development of ports. 
District and city Boards should also take 
part and be given an interest in the financial 
results of port development schemes. 

The railway mileage open for traffic 
in India in 1917-18 amounted to 36,000 
miles, of which one-half was broad gauge 
(5ft. 6 in.). The average return on the 
capital expenditure (about £365,000,000) on 


railways in that year amounted to about 
seven per cent. 

The Railway Act, especially in its 
administration, is at present extremely 
unsatisfactory. The provisions for the 
protection of life and property need to be 
strengthened. The liability of railways to 
compensate the public for material and 
pecuniary injuries needs to be increased. 
There have been numerous protests against 
the owner's risk notes under which railways 
charge the full freight rate without assuming 
liabilities. No civilized country permits 
carriers to do this. The entire policy of 
fixing rates should be revised so that 
railways will not appear to exist primarily 
to assist the export trade, largely in non- 
Indian hands, rather than to increase the 
prosperity of the indigenous population. 

The railways may be said to be already 
mostly nationalized so far as ownership 
is concerned. If, in future, the working of 
the railways were undertaken by Govern- 
ment agencies instead of being entrusted 
to private companies, public revenues 
would be greater, since profits would not 


have to be shared with the companies as 
is the case at present. 

The railway workshops should be utilized 
more largely and without racial distinction 
for the training of local foremen and 
mechanics. More than half of the railway 
Board should, in future, be composed of 
Indian business men. Food and other 
conveniences should be provided for the 
poorer classes of the travelling public under 
stipulated standard rules. All railway 
stores should either be manufactured in 
State factories or purchased in India. 

The use of motor-cars and motor transport 
has developed only within the past twenty- 
five years. Development in this respect has, 
however, been exceedingly rapid in the 
United States of America, where motor- 
cars are manufactured by the million and 
where an abundant supply of cheap gasoline 
is available. In the Western States of 
America horse conveyances have practically 
disappeared. Most farmers use motor-cars. 
There is said to be an average of one car for 
every eight persons in that part of the 
country. At the beginning of 1920 there 


were 7,600,000 motor-cars in use in the 
United States, whereas the total number 
in use in the whole of Europe did not 
exceed 500,000. The figures for India are 
not available, but they must be compara- 
tively very small. 

If the Government were to do no more 
than to give their goodwill, and if the 
import duty on petroleum were regulated 
with the consent of the leading Indian 
business men, a great motor-car industry 
could be established in India within a year. 
There are firms ready to start if only they 
could be assured of Government co-opera- 
tion and support. 

It is probable that within the next decade 
air transport will be the most powerful 
factor in the development of every country 
commercially, economically and socially. 
Schools should be immediately started to 
train Indians in civil aerial transport. India 
should not lag behind other countries either 
in the construction or navigation of aircraft. 

Traffic and commerce cannot be extended 
without good roads and cheap means of 


Roughly 200,000 miles of roads, of which 
55,000 were metalled and 145,000 were 
unmet ailed, were maintained by the public 
authorities in India in 1916-17. In 1917-18, 
Rs. 5,000,000 were spent upon military, 
Rs. 600,000 upon civil Imperial, and 
Rs. 5,200,000 on civil provincial roads, 
making a total expenditure upon roads of 
Rs. 10,800,000. 

All roads other than Imperial or provincial 
should be maintained by local bodies, 
with the general advice and financial and 
technical help of the provincial Board. 
Before new roads are constructed, provision 
should be made for their upkeep. Cart 
tracks from village to village should be 
left to the villagers themselves. Field 
tracks for conveying produce, especially in 
irrigated areas, are insufficient in many 
parts of the country and should be immedi- 
ately augmented. With a little advice and 
persuasion, the people will be quite willing 
to find both the money and labour for 
this purpose. 

The time will soon come, if it has not 
already arrived, when the bullock cart will 


be found altogether too slow. Good roads 
are, therefore, becoming increasingly im- 
portant. Light four-wheeled carts should 
take the place of two-wheeled carts. Small 
handcarts or barrows would save the rural 
population the labour involved in carrying 
head loads. Such carts would only require 
narrow tracks, as in Japan. 

Numerous streams are unbridged. A 
bridge construction programme should, 
therefore, be formulated for each district 
and some progress made from year to year, 
with the aid of contributions from the 
provincial Government. 

There is not much scope for inland 
navigation in India except on the river and 
canal systems of Eastern Bengal, Burma 
and Sindh, and, in a small way, in Madras. 
The public require precise information as 
regards existing facilities and the scope for 

Such inland navigation as is possible has 
been reduced by manipulation of railway 
rates so as to make it uneconomic. Coasting 
trade via Broach to Bombay was crushed 
in this way, as was also transport by water 


between Allahabad and Calcutta. Methods 
of this sort are doubly damaging to in- 
dustries, for they cause congestion on 
railways and destroy indigenous enterprise, 
which largely controls inland navigation. 

On account of the large volume of 
business centred in cities, traffic becomes 
congested unless communications are im- 
proved from time to time. Hard surface 
roads with suitable footpaths, underground 
and overhead railways, surface tramways, 
motor and animal draught conveyances are 
needed in some of the larger cities. The 
cities of Bombay and Calcutta require 
underground railways. It is understood 
that a tube railway project for Calcutta is 
under consideration. Suburban railways 
are needed in many cities to enable the 
business population to reside in healthy 
localities near their work. These con- 
veniences will, however, be too costly, and 
the actual construction will be too slow, 
unless the necessary iron and steel are 
manufactured locally. 

More and better postal, telegraph and 
telephone facilities are needed in India. 


Private individuals and companies should 
be allowed to construct and work telephones 
with a licence from the local authorities. 

When all is said and considered, the 
greatest resource of the country and the 
one hitherto least utilized is the energy and 
intelligence of its people. A way must be 
found largely to associate Indians with the 
work of developing the country's resources. 

For a generation or more to come, 
development may best be undertaken by 
bringing into existence, with legal sanction, 
local corporations in each region or area. 
The business men with organizing and 
directing ability should be brought together 
in each area and encouraged to form them- 
selves into corporations for the develop- 
ment of local resources. In any particular 
district, for instance, there may be mining 
corporations, irrigation corporations, cor- 
porations for developing road and motor 
traffic where such traffic may be found to 
be profitable, corporations for developing 
forest resources, public utilities, and 
water-power and specific industries which 


require Government co-operation. In all 
undertakings which are not carried on by 
purely private enterprise, the capital and 
the directing energy should, as far as 
possible, be derived from the area itself. 
Graduates from the local areas should be 
trained to take a leading part in the work. 
If such training is commenced at once, the 
supply of local talent will be found, within 
a period of from five to ten years, quite 
equal to all the development work in each 
province and district. The work of the 
corporations will itself be a good training 
ground. The country should not, in future, 
be allowed to suffer for lack of such prepara- 
tion and training. 

The work of development referred to in 
this chapter may be carried out in three 
ways: (1) By purely private corporations 
or agencies ; (2) by Government and private 
agencies working in co-operation ; and 
(3) entirely by Government agencies. The 
three chief requirements for this work are 
organizing and directing skill, capital and 
labour. Organizing and directing agency 
is nowadays quite as important as capital, 


and Indians must be trained for such 
employment. Some of the development 
work under irrigation, forests, railways, 
etc., may be carried out by means of loans 
raised locally. Notwithstanding the criti- 
cisms levelled at Indian workers, there is 
no doubt that, if suitably trained and 
organized, the supply of both skilled and 
unskilled labour will be inexhaustible. 

Government should appoint a commission 
of conservation for each province. Each 
bureau or branch of development work in 
the province should have a committee of 
non-officials, experts and officials, associated 
with its head. 

A central commission should co-ordinate 
the work of these provincial bodies, prepare 
designs, and suggest new developments. 

Only the largest works in each province 
should be carried out by Government or 
contractors working under Government 
supervision. All ordinary schemes, and 
even costly projects requiring only ordinary 
skill, should be entrusted to corporations 
of local contractors and business men. 

In this manner, many works may be 


built and assets created in the provinces 
with local capital, enterprise and labour. 
This will be the most natural and healthy 
form of development, both as regards 
equipping the people with skill, and creating 
public property in each region. 

Social Reconstruction 



Every care should be taken by the Govern- 
ment and people alike so to direct the work 
of reconstruction that, in industrializing 
India, the fullest possible advantage is 
taken of Western and Japanese experience 
to avoid creating labour complications, 
evil housing conditions and such other 
grave urban problems. 

In the chapter on Local Self-Govern- 
ment, reference has already been made to 
certain needs of urban progress and of 
rural development. A few additional notes 
on the same subject may not be out of 
place in their relation to social betterment. 

The smallness of the urban population in 
India has already been dwelt upon as one 
of her serious drawbacks. The agricul- 
tural character of the population has been 



maintained, hitherto, by limiting the urban 
areas and omitting to encourage industries 
likely to attract people from the country 
to the cities and towns. 

Some Indians may fear that the pro- 
posed increase of the urban population will 
only add to the existing slums and may 
point to the movement in Western coun- 
tries which seeks to take the city dwellers 
" back to the land." These critics must 
be reminded, however, that many of the 
Indian villages are hardly better than 
slums ; that if urban reconstruction be 
undertaken, the increase in urban popula- 
tion need not add blocks of slums to towns, 
and that many years must elapse before 
the urban population in India comes any- 
where near that of countries where city 
overcrowding has created a need for people 
to return to the land. In many cases in- 
dustries could be developed in or near the 
new group villages, and thus large urban dis- 
tricts might grow up under healthy and 
well-planned conditions, with broad streets, 
open spaces and such-like amenities. 

Each city and large town in India, as 


already suggested, should have a separate 
improvement Board under the municipal 
council to prepare schemes for expanding 
the areas under its jurisdiction and for the 
construction of houses on good models. 

In cities such as Berlin, extensions are 
planned and drains are constructed before 
building operations are begun. Owing, 
however, to the primitive conditions pre- 
vailing and lack of forethought in India, 
houses are built first, and only when sanita- 
tion becomes a crying need are drains 
thought of ! Often streets are only opened 
after houses have been built. 

Parks, playgrounds, theatres, museums, 
art galleries and other means of public 
recreation and instruction should exist in 
every urban area, together with readily 
accessible railway and tramway facilities, 
boulevards and other means of transit and 

It is of the first importance that sufficient 
space should be preserved for the natural 
growth of the locality. The local authority, 
too, should not fail to recover for itself a 
considerable portion of the increase in 


land values arising from public improve- 

As all cities, towns and villages are to 
have true self-government, it should soon 
be possible to insist upon a high standard 
of sanitation and civic utilities. At 
present, urban areas are allowed to grow 
up without regulation or organization. 
Serious attention needs to be given to the 
question of housing not only the indus- 
trial workers, but the people in general. 
In villages there are few properly built 
brick or stone houses, and it is quite com- 
mon to find cattle and human beings living 
under the same roof. 

Houses in towns are more substantial, 
but even they, as a rule, leave much to be 
desired. Little attention is paid to the 
ensuring of sanitary conditions. In order 
to raise the standard of living, a desire for 
better housing must be aroused and the 
people taught to appreciate the advantage 
of substantial masonry houses with tiled 
or terraced roofs. Such dwellings promote 
the health and comfort and therefore the 
efficiency of the people, whilst overcrowding 


reduces a nation's efficiency and work- 
ing capacity, and leads to many other 

The local authorities might set a good 
example by building a decent class of 
houses for their own servants and for all 
labourers engaged on public works. At 
the same time, building societies and 
companies on co-operative lines should be 
encouraged. In England, since the War, 
voluntary societies, commercial firms and 
local authorities are all carrying on more 
or less extensive building operations, whilst 
the Government constantly urges the matter 
forward and is helping with grants of 

Every house-owner should see that 

proper masonry drains and receptacles are 

constructed so that refuse water may not 

sink into the soil and form cesspools reeking 

with contagion. Separate receptacles with 

tight lids should be provided for dry refuse. 

It should be the duty of the municipal or 

other local authorities concerned to remove 

the contents of these receptacles. The sale 

of refuse to cultivators can sometimes be 



made a source of revenue to the local 

A great waste of human labour is 
involved in the management of households, 
particularly in old-fashioned methods of 
cleaning and cooking, based on tradition 
rather than on the scientific require- 
ments of cleanliness, order and finish. In 
these days of labour-saving and time- 
saving appliances, domestic economy has 
become a fine art., and it should not be 
necessary for women to spend so large an 
amount of time in domestic work as they 
do now. 

With suitable appliances and arrange- 
ments, even the ordinary non-domestic 
man can prepare, cook, serve and consume 
a meal, and wash up and put by the uten- 
sils, all in the space of little more than an 
hour ; whereas in India the women of the 
household make several hours' work of 
cooking even for a small family. Instruc- 
tion in domestic economy and art should 
be provided in schools and special institu- 
tions in every city or town ward and in at 
least every central village. 


To promote the social and cultural life 
of the people, every local authority must 
bring into existence clubs, reading-rooms, 
libraries, associations, etc., upon the model 
of those in progressive countries. Meeting 
places for people to come together, think 
together, and work together are indispen- 
sable for that co-operative effort which 
should be the watchword of the future. 

If business enterprise is to be developed 
there must be a sufficiency of accommoda- 
tion for travellers. In large cities there 
are hotels and satisfactory food supplies 
for foreign travellers, but no corresponding 
organization exists for Indians themselves, 
who when travelling are therefore subjected 
to many privations. The accommodation 
available for them either takes the form of 
caravanserais which do not provide food, 
making it necessary for them to carry 
their household goods along with them and 
do their own cooking ; or a poor class of 
eating-houses where only the roughest meals 
are served and no lodging arrangements 
nor ordinary sanitary conveniences exist. 

If the local authorities, perhaps with the 


assistance of voluntary societies, provide 
decent and comfortable hostels for travellers 
and others, they will be able to set a good 
standard for this class of enterprise which 
may eventually be taken up by local busi- 
ness men. If managed on modern lines 
they can be made to pay and also to pro- 
mote the business interests, comfort and 
convenience of the people. 

One of the first necessities of the country is 
the provision of abundant travelling facilities 
by rail and road for the middle and poorer 
classes of the indigenous population, in- 
cluding proper accommodation for eating 
and sleeping en route. Special care must be 
taken not to offend against caste rules or to 
wound susceptibilities. In time, however, 
it is to be hoped that common dining 
arrangements on a non-caste basis will 
become acceptable to the majority of the 
people, higher rates being charged for 
caste arrangements. 

As a beginning, Government should insist 
on all railway administrations providing 
these facilities for the indigenous popula- 
tion, whilst the municipalities or other 


local authorities should discharge this duty 
for their own areas. At the outset, some 
loss may be involved, but it is a public duty 
which should be fulfilled by the local author- 
ity until private enterprise takes it over. 

It has already been seen that a low stan- 
dard of living arises from the fact that 
agriculture is the one industry and conse- 
quently overcrowded. Arts and crafts 
having decayed and modern industry not 
having emerged to take their place, there 
is no organization or co-operation in the 
business life of the country. The average 
earning power amounts to about Rs. 180 
for a family of five persons. Thirty years 
ago, the average income of a family in 
India or Japan was about the same. To- 
day it is safe to say that the average 
earning power in Japan is three times 
what it is in India. 

One thing necessary towards raising the 
standard of life is the cultivation of the 
saving habit. The agricultural classes par- 
ticularly are in the habit of contracting 
debts without any thought of repayment. 
It should be reckoned a condition of 


respectability for every useful citizen at all 
times to have enough savings to carry him 
through two years of distress or lack of 

In advanced countries, people procure 
protection against unemployment, old age, 
sickness or accident by systems of insur- 
ance,, partly through voluntary societies 
and partly by State or municipal schemes 
which in Germany, Great Britain and 
some other countries are compulsory. 
Under the National Insurance scheme of 
Great Britain, weekly payments for medical 
insurance for employees are levied — one 
proportion from the employee, one propor- 
tion from the employer and one proportion 
from the public funds. 

A serious attempt should be made in 
India by every means possible to reduce 
poverty and to raise the standard of living. 
By education and organization it should 
be possible to abolish poverty altogether. 
Many people have regarded poverty as a 
social blessing. In the West, at all events, 
such ideas are now passing away and 
poverty is being rightly thought of as a 


great barrier across the path of civiliza- 
tion — as a social disease which must be 
cured and prevented. 

By the aid of large-scale production and 
a general system of co-operation, poverty 
should be made impossible. The model 
villages of Japan have set an example in 
this respect which might be profitably 
followed by their Indian prototypes. 

Labour all the world over, it must be 
remembered, is in revolt against bad treat- 
ment, sweating, slum life, and the other 
unsatisfactory conditions to which modern 
industry has subjected it. In India, too, 
the ignorance of the people has been ex- 
ploited by capitalists and employers, and 
it is, therefore,, not surprising that there 
should be increasing tension between capital 
and labour. 

It is extremely desirable that India, thus 
early in her industrial history, should face 
the problems which in Europe and America 
have caused so much misery in the past, 
and are at present the occasion of so much 
strife and dislocation of business. 

Better treatment should be ensured in 


future by giving the workers the oppor- 
tunity of voicing their views in the Legisla- 
tive Councils, through trade organizations, 
the Press, etc. ; also by providing economic 
education which will fit at least the abler 
among them to appreciate the complexity 
of the affairs with which they deal and to 
advance the interests of their class. 

After the formation of the German 
Empire, some of the leading German econo- 
mists urged upon the Government and the 
employers the necessity for raising wages 
and improving labour conditions so that 
the German working-man might, by in- 
creased energy and physique, produce as 
much as the British working-man, and help 
to wrest the trade from Great Britain. It 
was clearly believed in Germany that Great 
Britain's supremacy towards the end of 
the last century was due to the superior 
conditions under which the producers 

While employers should improve the 
wages and living conditions of their 
employees, the workers on their part might 
realize their own shortcomings. For in- 


stance, they neither work regularly nor 
organize efficiently. Every possible stim- 
ulus should be given both by Government 
and private endeavour to improve the 
national working habits so that pro- 
ductive power and earnings may be 

Inefficiency may, to a certain extent, be 
eliminated by the prevention of sickness 
and degeneracy, as well as by suitable educa- 
tion for the individual. This would not 
in itself, however, entirely do away with 
poverty, for so long as a purely competi- 
tive and profit-making system continues 
a portion of the population will remain 

The real solution of the problem lies in 
co-operation. By working together, each 
for all and all for each, the workers would 
be able themselves to reap the profits of 
large-scale production which under any 
but the co-operative system will go too 
largely into the pockets of the capitalist. 
The modern expedients of piece-work pay- 
ment, profit-sharing, etc., should therefore 
be discussed by employers and public men 


alike, with a view to stimulating production 
and raising wages. 

It would be necessary to appoint a com- 
mission to examine the trend of the labour 
movement with a view to avoiding the 
mistakes which have been made by other 
nations and solving Indian problems in 
the light of reason. The commission should 
be formed chiefly of Indians, with experts 
and officials added, and must be ready to 
face two or three years' hard work and 

From all that has been said it is clear 
that the country has a great deal to learn 
from outside experience. Indians will do 
well to arrange, through central organiza- 
tions, to send deputations of selected men 
and women to foreign countries to study 
all that can be learned of improved methods 
of civic government and social practices, 
with a view to adopting the most suitable 

Civics should form part of the social 
science courses of every university £ 

In every primary and secondary school, 
too, a spirit of citizenship should be aroused 


among the pupils, and the elements, at 
least, of civic government imparted to 

If the highest national ideals are to be 
fully realized in the future, they must first 
be created in the minds of youth. 



In order to qualify themselves for the 
new type of citizenship made possible by 
the constitutional reforms, it will be neces- 
sary for Indians to reorganize the national 
life so as to bring it more into line with 
modern conditions. 

They should make a careful study of the 
great social experiments that are being 
tried in various countries and introduce 
them wherever possible. The United 
States have " gone dry," and other lands 
are employing measures, of one kind or the 
other, to banish — or at any rate to regulate — 
drink, vice, the white-slave traffic, etc. 
Wholesome knowledge of sexual matters 
is spread broadcast by suitable literature, 
and confidential advice and treatment are 
supplied free in England. America is also 



setting the world a great example in getting 
rid of mendicancy by organizing charity. 
Various countries have inaugurated pen- 
sions for old persons and mothers, insurance 
against unemployment, sickness, and the 
like. Although many of these changes in 
their entirety may be unsuited to Indian 
conditions, they may yet afford suggestive 
guidance for wholesome and valuable 
changes in the country's social and econo- 
mic life. India must not obstinately cling 
to effete practices and rjermit herself to 
lag behind. 

The general outlook upon life in India, 
as things are now, is too gloomy to 
permit sound individual or social develop- 
ment. Far too common is the belief that 
life is merely a transitory stage in the 
passage of the soul to another world. That 
notion chills enthusiasm, kills joy, and 
promotes fatalism. The enervating climate 
and lack of proper nourishment react upon 
the nerves and accentuate the pessimistic 

In some cases, the joint-family system 
tends to produce drones ; some Indians 


actually take pride in the number of persons 
they maintain in idleness. If the person 
on whom the burden is placed dies, or 
is unable or unwilling to bear it, the 
dependants are left destitute, and often 
have to adopt mendicancy for a means of 
livelihood. Society should take immediate 
measures to put a stop to this degener- 
ating state of affairs. Begging ought 
to be prohibited by law, as in Japan, and 
a suitable allowance made for indigent 
persons by the State and local authorities 
or civic organizations. Persons suffering 
from blindness, sickness, mental disease 
and other infirmities are better cared 
for in institutions specially maintained 
for them. In particular, institutions should 
be provided for defective or friendless 
children, facilities afforded for medical 
examination in schools, and, where neces- 
sary, separate hospital treatment for those 
little ones who require it. 

While Indians feel that life is a burden, 
people in the West are full of hope and 
intensely active. They believe that the 
world is capable of indefinite improvement, 


and have faith in individual and collective 
effort. In India, too, with education and 
the new possibilities of responsible Govern- 
ment, the inherited pessimism of the people 
will gradually be dispelled by the new 
forces of Hope and Faith for the future. 

Indians not only have a morbid outlook 
upon life, but are divided into rigid groups 
known as castes and sub-castes. Social 
distinctions exist in every country — dis- 
tinctions based upon wealth, birth, or 
occupation. No country outside India has, 
however, a social system which cuts at the 
very root of human brotherhood, con- 
demns millions of persons to perpetual 
degradation, makes people hyper-exclusive, 
magnifies religious differences, and dis- 
organizes society. 

The Indian social system has been partic- 
ularly harsh upon the pariahs and so-called 
lower classes or " untouchables," estimated 
to number over 50,000,000 persons or more. 
As the name indicates, their very shadow is 
considered contaminating. They are kept 
in a state of abject submission and help- 
lessness. Their education is far more 


neglected than that of the higher castes. 
The fair Aryan hoped, by means of the 
caste system, to keep his stock untainted 
by intermixture with the dark Dra vidians. 
The Sanskrit term for caste — varna (colour) 
— bears eloquent testimony to this origin. 
Perhaps Nemesis led the Aryans in course 
of time to divide themselves first upon the 
basis of occupation, and later of birth. 
The desire to form separate groups for self- 
protection and religious worship became a 
potent agent in multiplying divisions. 

Whatever its origin, caste enters into 
every detail of individual life, and every- 
where plays havoc with it. Considerable 
time and energy is consumed in conforming 
to its requirements and progress above a 
certain standard rendered impossible. 

Marriage is not permitted outside strictly 
prescribed limits, though during recent years 
more and more individuals are defying 
such regulations. The division into sub- 
castes has, indeed, proceeded so far that 
often it is difficult to find suitable brides. 
There have even been cases where men 
have had to wait for the birth of a daughter 


in a family of the prescribed caste before 
they could get married. Such limitations 
have often resulted in marriages between 
old men and young girls. Marriage, funeral 
and other ceremonies are made the occa- 
sions of extravagance, and families thereby 
cripple themselves and have to scrimp and 
scrape for years and even for life. 

Boys and girls, especially among the 
higher castes, marry prematurely. They 
are physically too immature at that age to 
lead a married life, and they themselves 
and their offspring are thereby greatly 
handicapped in the struggle for existence. 

The re-marriage of widows is regarded by 
high caste people as improper. Progressive 
persons are, however, more and more con- 
travening conventionality in this respect. 

Even though there are millions of widows, 
many of them of child-bearing age, and an 
inordinately high rate of mortality due to 
poor sanitary arrangements, low nourish- 
ment and famine, the population is increas- 
ing at a more rapid rate than material 

In addition to all these marital evils 


produced by the social structure peculiar 
to India, caste regulations interdict foreign 
travel. This seems strange when it is 
remembered that in ancient times Hindus 
were a great sea-faring people, trading with 
distant countries and even possessing 

Unfortunately, many among those In- 
dians who brave the wrath of their com- 
munity and go across the " black water' 
(kala pani) are coolies who do not raise India 
in foreign estimation. Even many educated 
Indians who go abroad do not understand 
foreign habits, because society is so con- 
stituted that whatever changes are effected 
must be made stealthily. Yet, strange to say, 
the educated classes are copying the Western 
habit of drinking, and the consumption of 
alcoholic liquors is on the increase. With 
the growth of an urban population and the 
undermining of old beliefs, vice has shown 
a strong tendency to spread. 

As shown by the census, literacy among 
women in all classes falls far below that 
among men. This is due to prejudices 
engendered by tradition, which condemns 


women to be economically dependent upon 
men, makes it impossible for them to engage 
in any profession other than that of a 
housewife, and in some parts of the country 
even compels them to observe strict purdah, 
and lead a secluded life. 

Since the time of Raja Ram Mohan Roy, 
progressive Indians have sought to free 
society from these evils. Their efforts, how- 
ever, have not fructified as they should 
have done ; firstly, because of the appall- 
ing illiteracy prevailing in the country, 
especially among the women, and secondly, 
because Government, not being of the 
people, could not themselves seriously 
undertake social reform, and at times even 
felt constrained to discourage Indian 
reformers from doing so. Nor has the 
department of education sought to incul- 
cate healthy and stimulating ideals in the 
rising generation. The Government has, 
indeed, tried to teach the people to be 
humble and contented with a state of 
subordination, with the result that India 
drifts as a rudderless boat on an uncharted 


No extensive social reconstruction is 
possible unless a vigorous and systematic 
effort is made to banish illiteracy from the 
land, and the people, especially women, are 
given education which will broaden their 
outlook upon life, make them shake off 
lethargy, and rouse in them the ambition 
to better their condition. 

While the right type of education will 
automatically do much, a special effort, a 
comprehensive social campaign, is indis- 
pensable for the speedy removal of the 
nation's handicaps. 

Since caste is responsible for most of the 
social disorders from which India suffers, 
a special attempt should be made to render 
the system more elastic. 

The caste regulations in regard to mar- 
riage, especially, need to be relaxed. While 
inter-racial marriages may be objected to 
by some persons, religion or caste should 
not constitute a bar to marriage. This 
reform would be facilitated if the central 
legislature would, as soon as possible, pass 
a law removing all civil disabilities which 
at present stand in the way of such unions. 


While good legislation can accomplish 
much, the reform of society cannot be 
brought about by the mere passage of laws. 
The leaders of the various communities 
will not only have to carry on a vigorous 
propaganda against prejudicial customs, but 
also set worthy examples for the people 
to follow. 

So long as enlightened men continue to 
marry their children prematurely, it is 
hopeless to expect that early marriage, as 
an institution, will disappear from the 
country. Girls should not be married 
earlier than sixteen, nor men before they 
are twenty-two years of age. Men and 
women in Western countries marry some- 
what later still in life, but at least for the 
present, there should be two or three years' 
difference in favour of India, to allow for 
existing prejudices (right or wrong) and 
climatic conditions. 

There can be no objection to the existing 
practice of the betrothal of girls at any 
age after twelve, provided that consumma- 
tion of marriage is legally deferred until the 
age of sixteen, and provided also that 


the death of either party to the con- 
tract leaves the other party free to re- 

If early marriages were stopped, there 
would be fewer widows in India ; and the 
superstition which prevents the re-marriage 
of widows would be less keenly felt. Both 
common justice and prudence require that 
the evils of enforced widowhood and its 
attendant inhumanities and barbarous prac- 
tices be removed. 

An entirely new status should be 
accorded to women. The time has come 
when Indians must seriously consider 
whether the passive life, to which they 
condemn women with a view to preserving 
the so-called proprieties and decencies of 
life, is worth the appalling price the country 
is forced to pay in the shape of loss of work 
and intelligent effort from half the popula- 
tion of the country. 

Indian women must be given the oppor- 
tunity to acquire the highest forms of 
education. If they are trained to enter 
congenial professions, and given special 
facilities for obtaining profitable employ- 


ment, their economic position and, with it, 
their status will be improved. 

Similarly, the position of the " untouch- 
ables,"— i.e., persons whose very touch is 
deemed pollution by the caste people, — 
should be improved socially, education- 
ally, and economically. Much will 
depend upon material prosperity, for noth- 
ing levels social position so effectively as 
economic success. If the lower classes are 
given the opportunity to amass wealth, 
members of higher castes will serve under 
them, their status will inevitably be im- 
proved and they will be able to associate 
in public and social functions with the 
upper classes. 

The very idea of interfering with caste 
canons will doubtless be viewed with horror 
by every pious Hindu who has chosen to 
isolate himself from the rest of the world. 
He should, however, remember that the 
permanent interests of the country demand 
that all artificial barriers to progress should 
be removed. 

As a matter of fact, in some respects the 
caste regulations are already being disre- 


garded. Medicine, ice and aerated waters, 
bread and biscuits, are used without ques- 
tion by high-caste people who nevertheless 
consider that water, if touched by a low- 
caste person, conveys pollution. If In- 
dians were consistent, they would consider 
that clean water and clean food may be 
accepted from any clean person's hand. If 
this were done, a saner social system would 
be built up and the business of the country 
would be improved. 

If the country is to move forward at a 
rapid pace, Indians must increasingly dis- 
regard caste restrictions, break bread with 
one another and cultivate habits of inter- 
national intercourse. Before leaving India, 
however, they should be taught European 
habits and customs. In Japan, such train- 
ing is provided by Government to 

Upon their return, Indians should be 
freely admitted into their caste and much 
should be made of them, so as to learn 
modern ways from them and to encourage 
others to travel and see the world for them- 


Unless India is willing to adopt many of 
the institutions, practices and habits which 
promote business and benefit society in 
other lands, she cannot hope to advance. 
These include regular hours of work in all 
business places, appreciation of the value 
of time, punctuality in attendance, stan- 
dard habits of association, a spirit of 
service and co-operation, and the proprie- 
ties to be observed in conversation in 
business relations, at table, and at social 

Standards of social functions should be 
prepared. As far as possible, everything 
that is good and noble in Indian tradition 
and life should be preserved, and new 
practices grafted upon it. The basis of 
behaviour should be sincerity, honesty, 
and utility. 

Religion, the root of all social practices 
in India, has become a mere matter of form 
or ritual rather than a way of life. Indians 
must learn to associate high principles, 
character, morality and discipline as essen- 
tial parts of their creed. 

Small prayer books should be prepared 


by every religious denomination. These 
should include rules governing morality 
and conduct, formulated with a view to 
inculcating a spirit of service to fellow- 
beings, discipline, patriotism, clean life, 
and clean practices, tolerance and adher- 
ence to principle. 

Morality should be taught in every 
school from the lowest to the highest, just 
as ethics forms one of the principal sub- 
jects in the Japanese curriculum. The 
more rigid practices should, of course, be 
left for each individual to decide for himself 
or herself, but moral teachings should 
certainly be introduced into daily prayers. 

A question of the greatest importance at 
the present time is on what lines social dis- 
cipline shall be developed among the Indian 

The older class of Indians complain that 
Western education is undermining disci- 
pline and reverence to authority. But are 
not such phenomena always observable in 
societies which are undergoing fundamen- 
tal changes ? 


In all European countries, ever since the 
beginning of the modern era, precisely 
similar complaints have been rife. 

When old systems begin to fail, when the 
priesthood loses its position of authority 
and social sanctions give way, it is inevit- 
able that the elders and established guides 
should look on with apprehension lest 
society, without the props so long relied 
upon, should go to pieces and personal and 
domestic morality, in particular, be de- 
stroyed. Such lamentations have never 
been more frequent than since the close of 
the War. 

In Western countries to-day, the central 
problem is to work out a system of co-oper- 
ative discipline in school, college, office 
and factory. Some notable examples of 
such experiments are to be found in the 
schemes adopted in the Pestalozzian and 
Montessori schools, self-government in the 
higher schools, mutual aid and self-govern- 
ing responsibility in the institutions for 
delinquent youth, and similar experiments 
in American prisons. Also in the joint 
Industrial Councils of employers and 


employed, the scheme of complete self- 
government tried in the English building 
trade, and the rapid spread of the national 
guild idea. 

Unquestioning respect for authority is 
plainly declining in Western countries. 
For one thing, the bureaucratic system, 
grown more powerful during the War, has 
not increased respect for government. 
Emploj^ers must meet their workpeople in 
council. Parents must give their children 
reasons. Women claim equality with men 
and have already secured equal opportuni- 
ties of entry into most professions and occu- 

What of India ? Her vast population 
and the peculiar character of her socio- 
religious system, now yielding — perhaps 
too fast — to modern forces, are said to 
make her problems infinitely more difficult 
than those of the Western world. Her 
climate, too, is no doubt a disadvantage 
and the education given to her children 
affords no practical preparation for life. 

The Government has been apprehensive 
of any co-operative efforts by the people 


and has actively discouraged all forms of 
autonomous organization or societies for 
mutual aid. 

This has had fatal results in stifling vital 
interest in knowledge and work among the 
people, and has dangerously suppressed 
social emotions, which are, therefore, liable 
from time to time to take mischievous direc- 

The Press is in chains ; anti-sedition 
laws flourish ; the young minds in college 
and school learn nothing of the real facts 
of national developments, and their 
thoughts dwell in a world too far from life's 

There is now no agency or institution 
with sufficient authority to utilize and 
develop fine Indian traditions such as the 
relation between teacher and pupil {guru 
and chela) : or that wonderful conception 
of group loyalty which is the finer side of 
the caste system. 

The lines on which effective organization 
in these and other respects can be fully 
developed will be discussed in a later 
chapter. Meanwhile, this may be said : 


India must rely upon her educated young 
men and women to attack the great task. 

Several original institutions and move- 
ments have alread}^ been initiated, such as 
the Anglo -Vedic College, the Gurukula, the 
Tagore school, volunteer work under Mr. 
Gokhale's Servants of India Society, the 
Calcutta volunteers, etc., although, as all 
these live only by sufferance, their scope is 

Social discipline can be easily enforced 
among college-educated young men, but 
even they will need authoritative guidance 
from the leading men of the country. 
Among the rural population, much can be 
done along the lines of agricultural and 
craft education already urged, but there is no 
doubt social discipline will come mainly 
from the development of the co-operative 

Among the industrial workers, it must as 
inevitably come through their own indus- 
trial associations. 

The necessity of Indian trade unionism 
must be faced. The spirit of industrialism 
will mean the continual danger of anarchy 


and violence unless the employing class 
goes out to meet the problem frankly by 
peaceful methods of negotiation and con- 
ciliation. The Indian industrial workers 
will inevitably be organized in one of two 
ways : either along the aggressive lines now 
being pursued b}^ the unions in Madras, 
or on the lines already suggested in the 
preceding chapter. 



When the late Prince Albert Victor, the 
grandson of Queen-Empress Victoria, visited 
the country in the 'eighties, a triumphal 
arch erected by the lively-witted people of 
the city of Poona, greeted him in these 
words : — 

"Tell Grandma we are a happy nation, 
But nineteen crores 1 are without education." 

India to this day continues to be the land 
of unlettered people. 

It is only necessary to compare the amount 
spent upon education in India with similar 
expenditure in other countries to under- 
stand why she lags behind progressive 
nations. In 1916-17, the amount spent 
for each 100 of the population was : — 

1 i.e., 190 million people. 





Great Britain 
Canada . 
United States 







Whereas the population attending ele- 
mentary schools in India was but 2'9 per 
cent., it was 14*3 per cent, in Japan, and 16 '5 
per cent, in Great Britain. If 100 is taken 
as an index number for India's proportion 
of elementary school attendance, the follow- 
ing significant figures emerge : — 
Children at School. 



India ..... 
Japan ..... 
Canada ..... 
Great Britain .... 
Australia ..... 
United States .... 



The percentage of girl pupils at school 
to the total female population is much 
smaller than these figures would indicate. 
Social prejudice and lack of educational 
facilities are responsible for keeping 


women's education appallingly backward. 
As already emphasized, India must recog- 
nize that it is impossible to make rapid 
progress so long as half of the population 
remains illiterate and inefficient. 

Such primary education as is provided 
is of an unpractical character. The culti- 
vator and the craftsmen view it with dis- 
favour, as tending to estrange their boys 
from their surroundings and to make them 
dissatisfied with their hereditary calling 
without necessarily fitting them for any- 
thing better. 

Secondary and university education, 
though producing many able recruits for 
subordinate positions in the Civil Service, 
does not provide the men needed to carry 
on the work of agriculture, engineering, 
commerce and technology. The provision 
for training in economics and history is 
inadequate, and the study of those subjects 
is even discouraged. An attempt is actu- 
ally made to teach economics in such a way 
as to render India's emergence from a state 
of dependency difficult. 

The fees charged for education in the 


higher branches are exorbitant, and the 
scholarships are too few. In consequence, 
a mass of talent in humble circumstances 
is left undeveloped and even unsuspected. 
The policy of increasing fees in order to 
meet increasing expenditure will defeat 
its own ends. 

Britain herself has had to pay a heavy 
price for her hand-to-mouth policy in regard 
to education. The educational chaos still 
existing there compares unfavourably with 
the great yet orderly progress made by Ger- 
many and Japan, both of which countries, 
after weighing and testing the educational 
systems of the world, absorbed the best of all. 

Now that a beginning is about to be made 
in responsible government in India, it is 
necessary that the standard of education 
should be such as to fit the people to exer- 
cise the powers and responsibilities of 
citizenship, and to take full advantage of 
the social and economic opportunities which 
are opening before them. 

India may advantageously follow in re- 
spect of education the example set by Japan. 
That country, though not so very long ago 



as backward as India is to-day, has so 
raised her standard of education as to ensure 
a steady growth of progress and prosperity. 

Another lesson in this respect has been 
provided by the enterprise shown by the 
Americans in educating the Filipinos, who 
in twenty years have advanced far ahead 
of Indians in percentage of literacy. The 
system of education introduced into the 
Philippines, moreover, lays great stress 
upon vocational teaching, and therefore 
conduces to rapid economic development. 

Within the next ten years, India's educa- 
tion budget should approximate £25,000,000, 
allocated as follows : — 

Branch of 


per 1,000 of 

the total 


of B. India 


Cost in 

Elementary Schools 
Secondary Schools . 
Universities . 
Special Education . 











Deducting the present total expenditure 
of £7,500,000, and assuming that another 
£7,500,000 will be met by local governing 
bodies, there will remain a deficiency of 
£10,000,000, which will have to be met 
partly by increased taxation and partly 
by means of a loan. The unproductive 
debt of India is very small. Government 
should not hesitate to add to it such a 
profitable investment as an education loan. 

Expenditure on education, like labour 
expended upon tilling and fertilizing the 
soil, will repay itself many fold. Since 
the nation will reap the first-fruits of this 
harvest, the increasing outlay upon educa- 
tion should, in the main, be a national 
charge. The fees should be merely nomi- 
nal, and the scholarships sufficient in 
number really to encourage talent and 

Every provincial Government should 
develop its educational department and 
appoint a Minister of Education. That 
department should be in close touch with 
every city, town, and even village, which 
should also have education councils or 


committees to carry on local work, and to 
become centres of thought and enlighten- 
ment in every branch of education and 
self-improvement, whether for young people 
or adults. Such committees should main- 
tain some sort of institute, with a reading- 
room, lecture-room, and at least the nucleus 
of a reference library. 

The education council of the city or 
town should be a very important body 
with far-reaching influences. It might 
consist of representatives of the provincial 
Government, the local authority, the near- 
est university, and any education or recrea- 
tive associations, and should include 
professors, teachers and wage-earners, while 
some members might be co-opted from 
among distinguished men and women. 

The educational institute, in addition 
to libra^, reading-rooms and lecture-hall, 
might include a museum, concert-hall and 
possibly even a theatre. Professors and 
teachers should be given the opportunity 
to visit other districts and provinces, and 
conferences should be held from time to 
time for the exchange of views. 


Each large village should have at least 
one primary school. Smaller villages 
might be grouped for this purpose, after 
the fashion of the combinations of rural 
school- districts in some parts of the United 

It is necessary to formulate a programme 
of national education along broad, well- 
conceived lines, and with something like 
deliberate choice of the means best adapted 
to the desired end. 

Commencing with education broad-based 
on the nation's childhood, no doubt some- 
thing like 90 per cent, of the school popula- 
tion would attend the primary schools. 
In that case, instead of the present elemen- 
tary school attendance of 6,000,000, India 
should have 35,000,000 boys and girls 
attending primary schools, later to emerge 
with at least sufficient mental equipment 
to give them alertness, self-confidence, and 
eagerness to improve and progress. 

The school-life should extend from five 
or six to twelve years of age. The elemen- 
tary course should comprise the " three 
R's " and, in addition, such subjects as 


drawing, nature-study and the elements 
of business morals, especially the necessity 
of discipline in all realms of life, the 
value of time, and behaviour towards 

Linked with the elementary school 
system, there should be " vocational " 
schools, to provide training in the elements 
of agriculture, commerce, handicrafts, 
carpentry, engineering, woodwork, smithing, 
and other trades for the boys, and cookery, 
dressmaking, nursing and housewifery for 
girls. Probably 60 per cent, of the boys 
in rural areas would require agricultural 
training. Where a vocational school is not 
possible, arrangements might be made for 
the requisite subjects to be taught in con- 
tinuation classes on special week-days or, 
perhaps, in the evenings. 

Pupils going direct from elementary to 
secondary schools need not take the primary 
vocational or continuation course. Since 
probably not more than 10 per cent, of the 
children would pass to the secondary 
schools, the vocational course would follow 
in most cases, continuing for perhaps two 


to four years according to the subjects and 
the pupil's intelligence. 

Most cities and towns should be secondary 
school centres, admission to the secondary 
school being secured either by means of a 
scholarship, or by payment of a reasonable 

Four to six years in the secondary school 
should arouse in the student an intelligent 
interest in the affairs of everyday life, and, 
in a measure at least, make him clean think- 
ing and clean living, cultivate his powers 
of observation and generalization, develoj^ 
in him such elementary virtues as industry, 
thrift and voluntary co-operation with his 
fellows, awaken his innate sense of citizen- 
ship and public spirit, and give him a good 
general grounding for his future career. 
The practical subjects taught should 
include civil and mechanical engineer- 
ing, technology, agriculture, commercial 
methods, medicine, cabinet-making, pot- 
tery, handloom-weaving, dressmaking, 
metal work, leather work and other handi- 
crafts and practical workshop trades, especi- 
ally those connected with house-building. 


These practical courses should not in 
any way interfere with the liberal educa- 
tion. Both should go hand in hand, or a 
general education might be followed by a 
special vocational course, in which theory 
and practice would be developed con- 

In many cases a student well qualified 
to proceed from the secondary school to the 
university, but unable to take advantage of 
a full university course, may yet be able to 
devote a certain amount of time to higher 
studies. To meet such cases, the universi- 
ties should assist the local education 
authorities to provide training in the more 
immediate and practical phases of 
" higher " education. Voluntary agencies 
would undoubtedly be found willing to 
assist in affording such opportunities, as is 
the case in Japan and other countries. 

In addition to the usual professional and 
commercial subjects, such university exten- 
sion courses might include languages, 
finance, natural science, music, painting, 
etc. The object of such classes should be 
to enable students to qualify themselves to 


take a leading part in a specific trade, art, 
or profession. 

The disadvantages of a purely literary 
education are so apparent that many great 
rulers have caused their sons and daughters 
to be trained in practical trades and handi- 
crafts. This is always done in the case of 
the children of the British Royal Family. 
Cities in the United States and Canada 
show much enterprise in providing com- 
mercial and technical education. It behoves 
Indian cities to do likewise. 

The university should, of course, aim 
particularly at developing leaders, gover- 
nors, thinkers, administrators and directors 
for every branch of political, social, com- 
mercial and industrial activities. Among 
the subjects taught should be medicine, 
architecture, civil, mechanical and elec- 
trical engineering, chemistry, mining and 
metallurgy, scientific agriculture, forestry, 
ship-building, economics, finance and statis- 
tics. The subjects which will give the best 
results for the country at present are 
commerce and mechanical engineering and 


Within the next five years, the number 
of universities should be raised from the 
seven now in existence to about twenty. 
Official control should be entirely with- 
drawn, and, as in Canada, each university 
made a self-governing institution with 
provincial support. 

Every province should also provide for 
the maintenance in progressive countries 
of bands of students, who should pursue 
advanced studies in some particular branch 
of industry or carry on research work. 
These students should be selected from 
those who had acquitted themselves well 
in commercial and industrial subjects, 
chemistry, economics, civics, sociology and 
other courses. In addition to special train- 
ing for research work, it should be necessary 
for them to have mastered a foreign lan- 
guage such as French, German, or Japanese. 
The provincial Governments should at 
first find one-half of the money required for 
this foreign travel and study. 

But for the work done by the Japanese 
trained abroad, dyeing, tanning, oils and 
fats, paper-making, machinery, glass, porce- 


lain and pottery, and other industries would 
not have made the phenomenal progress 
which has been achieved. If India is to go 
forward, she must follow the Japanese 
example in these respects. 

Schools for the blind, the deaf and dumb, 
and other defectives, will no doubt be estab- 
lished as adjuncts to general education, as 
soon as the new educational machinery is 
set in motion. 

The development of ordinary and special 
education in India depends largely upon 
the effort put into the work of training 
teachers. The facilities for this purpose 
at present existing are utterly inadequate, 
while the character of normal instruction 
leaves much to be desired. The salaries 
paid to teachers are much too low to attract 
the right type of men and women to the 

Both the Government and the people 
must recognize that only by pursuing a 
liberal educational policy, and making gener- 
ous financial provision for schools and 
colleges can they lift India out of her present 
low condition and ensure rapid progress. 

Shaping the Future 



Do the people of India propose to profit 
by the lessons which world experience has 
to teach them, or will they be content to 
allow matters to drift and themselves 
grow weaker and poorer year by year ? 

This is the problem of the hour. They 
have to choose whether they will be edu- 
cated or remain ignorant ; whether they 
will come into closer touch with the outer 
world and become responsive to its influ- 
ences, or remain secluded and indifferent ; 
whether they will be organized or dis- 
united, bold or timid, enterprising or 
passive ; an industrial or an agricultural 
nation ; rich or poor ; strong and respected, 
or weak and dominated by forward nations. 
The future is in their own hands. Action, 

273 t 


not sentiment, will be the determining factor. 

Nations are made by their own efforts. 
No nation can shape the life of another. 
It has been said that the politician, the 
sociologist and the educator should put 
their heads together and determine the 
land of world they wish to create, and then 
order the processes accordingly. It should 
be easy for India, if she made the effort 
on an adequate scale along lines suggested 
by world-experience, to will the character 
of her future, and so to shape that future 
that, like Canada and Australia, she will 
soon become a self-governing unit within 
the British Empire. 

The United Kingdom, for instance, as 
was recently stated by Mr. Lloyd George, 
is more than four-fifths industrial and com- 
mercial and one-fifth agricultural. The 
country does not grow its own food, but 
concentrates its attention upon industry, 
commerce, ship-building and ocean freight, 
economic exploitation, and ruling the weaker 
and backward races. It finds this form 
of activity to be more remunerative, and 
provides an incomparably higher standard 


of comfort for the nation than if the man- 
hood of the country remained at home and 
grew crops. There are risks, of course, in 
following such a national policy. Political 
hostilities may be roused, food supply may 
run short, and emergencies of one sort or 
another may arise : but the country faces 
the risks with courage and determination, 
because of the great advantages and high 
standard of living assured by its present 

Japan is closely following the example 
of the United Kingdom. Already her 
production from industry is double that 
from agriculture, and her commerce is 
growing rapidly. 

The United States of America and 
Canada, on the other hand, are so vast in 
area and so replete with resources and 
opportunities, that they have no incentive 
to acquire more land for the sake of pro- 
viding lucrative employment for their 
people. On the contrary, they are inviting 
immigrants to settle there with a view to 
increasing production and profits. They 
have developed agriculture and industry 


to a high level of efficiency, and as they 
want markets for the products of both, 
they are now, particularly since the close 
of the War, extending their shipping indus- 
try and foreign trade. 

While the rest of the world has been 
forging forward, India has been standing 
still. Her resources in materials have 
remained undeveloped. Her administra- 
tion, industry and trade have been so 
organized that they have given but scant 
opportunities for the employment and 
development of the talent and energy of 
the people of the soil. 

Experience shows that a nation is the 
most effective unit of combination for 
securing to the people composing it the 
maximum benefit from their aggregate 
activities and efforts. Scattered com- 
munities cannot benefit themselves or their 
country. In order to develop the political 
and economic strength possessed by the 
Dominions, India must in future cherish 
and develop a spirit of nationhood. Ex- 
President Taft, of the United States of 
America, has said : — 


" I believe in nationality and patriotism, as dis- 
tinguished from universal brotherhood, as firmly as 
any one. I believe that a nation spirit and patriotic 
love of country are as essential in the progress o the 
world as the family and the love of family are essen- 
tial in domestic communities." 

Addressing the International Congress of 
Philosophy at Oxford so recently as Septem- 
ber 27th last, Mr. A. J. Balfour claimed 
that nationality lent itself more than any 
other system to modern development, and 
to all the complex interests of a very 
highly complex modern community. He 
thought that among all forms of producing 
human co-operation, the best way of 
getting a full democratic constitution was 
through the principle, as far as they could 
develop it, of nationality. 

India must develop the idea of nationality ^ 
and endeavour to organize and work out her 
national destiny along broad lines. Love 
of country should be encouraged, for India 
as a whole as well as for the provinces, 
the city, town, or village of residence. By 
means of suitable propaganda, pride should 
be cultivated in all good and great things 
inherited from the past, and enthusiasm 


to raise the country from good to better 
as years go by. Love of fellow-men and 
pride in national leaders, both past and 
present, should be inculcated. The indi- 
vidual citizen must be made to understand 
that in helping his fellow-men he is doing 
good to himself, the country as a whole, 
and to succeeding generations of his coun- 
trymen. By organization and united effort 
every individual and the nation collectively 
will gain. The lesson for India from world 
experience in this respect is that she can 
promote her interests only by working after 
the example of the Dominions as a 
united nation. 

A nation that goes counter to world- 
experience and world-standards is bound 
to bring about its own ruin. This is what 
is happening in India. Sound economic 
laws are being transgressed, and the ex- 
perience of foreign countries is being 
ignored. The lines on which the country 
should advance in future are quite clear. 
If Indians do what ten other nations have 
done successfully, they cannot possibly 
go wrong. Where the Government helps 


them in their objects and plans, the 
public should render whole-hearted co- 
operation. Where the Government fails 
to act, the people should have an indepen- 
dent policy and organizations of their 
own to accomplish their object by their 
own effort, making the most of the oppor- 
tunities open to them. 

A nation is a super-combination of 
organizations consisting of the leading men 
of the country and large sections of the 
population engaged in various occupations, 
held together by mutual interest and the 
authority and influence of Government. 

The Government and the people usually 
supplement each other's efforts in policy, 
organization and production ; and the 
object of establishing national organiza- 
tions with the Government at the apex of the 
system, is to increase political power, 
national industry and social betterment. As 
the aims of the leaders of the people and of 
Government are not identical in India, 
there are at present no organizations com- 
mon to both for promoting the general 
welfare. If the country had a definite 


scheme of national life, and definite 
national programmes which commanded the 
confidence of the majority of the people, 
individuals and associations would be able 
to shape their own activities in accordance 
therewith. As it is, the absence of common 
ideals has led in local areas to inaction 
and stagnation and much misdirected 
and unproductive effort. 

To avoid this waste in future, a definite 
move should be made towards building 
up an Indian nation by outlining national 
plans and programmes in the political, 
economic and social spheres. An attempt 
has been made in previous pages to indi- 
cate the character of the national plans 
necessary to deal with India's recon- 
struction problems. 

If the Government helps in the work of 
nation-building, the British nation will 
rise in the estimation of Indians, and will 
win their deepest gratitude. It is, how- 
ever, too much to hope that the Govern- 
ment, as at present constituted, will do 
much in this direction. This being so, the 
people must prepare for themselves a 


programme of reconstruction that will 
advance their own national interests. 

The speediest way for Indians to win 
complete responsible Government is to 
deserve it and work for it. If they expect 
to receive it as a gift from the British 
Government, it will be very slow in coming. 

Canada experienced the same difficulties. 
The British officials there considered them- 
selves the custodians of Imperial responsi- 
bilities and at first opposed the growth of 
the nationalist sentiment. What fol- 
lowed may be stated in the words of Sir 
Robert Borden, the late Premier of that 
Dominion : — 

" Step by step the Colonies have advanced towards 
the position of virtual independence as far as their 
internal affairs are concerned, and in all the important 
instances the claim that has been made by Canada 
has been resisted at first by the Imperial statesmen 
and finally conceded, proving an advantage both to 
the Mother Country and the Colonists." 

Writing in The New Era in Canada, Mr. 
John W. Dafoe, a well-known journalist, 
observes : — 

" Influences radiating from London have sought 
from time to time to check or discourage the march 
forward of Canadian nationalism in the supposed 


interests of the Empire, and these have never lacked 
the zealous co-operation of strong Canadian groups in 
Canada. Experience has shown, however, that, 
despite the strength of the ultra-British group, the 
programme of national Canadianism goes forward, 
and a position once occupied is never lost." 

The best method of national activity 
should be selected. This will be possible 
only if delegations of Indian statesmen, 
students and business men are sent abroad 
to study up-to-date foreign systems, theories 
and practices. 

Such a plan has been followed by Japan 
ever since she set her feet upon the path of 
modernization. Men and women students 
were sent by the Government to every 
country in the world to study foreign 
institutions, educational methods, juris- 
prudence and social relations. The infor- 
mation they carried back with them was 
pooled, and from it were selected the 
methods which, it was felt, were best 
suited to Japanese requirements. These 
were made the bases of national policies. 
As Professor W. A. Osborne said hi a 
speech recently delivered in Ottawa, re- 
ferring to the presence of Japanese students 
in Canada : — 


" They (the Japanese students) were not there (in 
Canada) in a purely personal capacity . . . they 
were there as part of a great body of the chosen youth 
of Japan who had been sent out from that country to 
rifle the intellectual resources of the countries to 
which they were accredited or sent in the interests of 
their own nation. That is to say, their Government 
practically hand-picked those men and sent them out 
to study. . . . That was a great national scheme, 
and I have not the slightest doubt that it was the 
eclectic educational methods that Japan adopted 
thirty or forty years ago . . . that enabled Japan to 
pass so quickly from the rank of a hermit feudal state 
into the rank of a first-class power, with which even 
Great Britain was proud to make an alliance." 

India must develop a type of national 
life suited to her circumstances and aspira- 
tions. She desires to be a self-governing 
Dominion like Canada — to possess autonomy 
within her own borders, and to be allowed 
to co-operate for defence and develop- 
ment with Great Britain and other self- 
governing units within the British Empire. 
Such a type of national life will be impossi- 
ble unless the people are taught to unite, 
and to fraternize for the promotion of 
essential objects of interest common to large 
areas of the country and to India as a 
whole. The discordant elements among 
the population must be gradually har- 


monized. They should learn to acquire 
the spirit of unselfish service and of respon- 
sibility for the public good. 

The process of unifying the tastes and 
mentality of a population differing in 
race, religion and language, by means of 
education and training, is at present going 
on in the United States of America, where 
the heterogeneous immigrants who have 
gone there from all parts of Europe are 
being "Americanized." Acting on the 
same principle, India must recognize that 
certain standards of taste, thought and 
sentiment are necessary to union, and 
should devise and carry out a comprehen- 
sive scheme of " Indianization," with a 
view to creating a new type of Indian 
citizenship and building up an efficient 
unified Indian nation. 

The principal characteristics to be de- 
veloped in the life and habits of the people 
under an " Indianization " programme 
should, in essential, be as follows : — 

(1) Love and pride of country (nation, 
province, city, town, or village) ; 
a high sense of self-respect and 


personal honour, and a spirit of 
service, combined with loyalty to 
the Sovereign and to the British 

(2) Use of a common language in every 

province, and of English as the 
lingua franca. 

(3) A minimum of six years' compulsory 

general education, and a further 
two to four years' vocational course 
for every boy and girl, due attention 
being paid to games and sports and 
physical development, and to moral 

(4) Training in civics and thrift in 

schools, and, for adults, in special 
institutions, or by lectures and 

(5) Organized effort to eradicate un- 

healthy ideals and practices known 
to handicap the Indian and to 
standardize existing good traits, 
practices and traditions in the 
country, and protect them from 
disuse or decay. 

(6) Cultivation of a spirit of initiative and 


habits of closer association ; uni- 
formity of dress, as far as possible ; 
acquisition of business discipline 
and the usages of civilization ; travel 
among all classes of people, includ- 
ing the establishment of hotels and 
better railway facilities for the 
middle and poorer classes. 

(7) Equipping all classes of the people 

with correct ideals and objectives 
to work for, so that individual and 
local effort may be in consonance 
with national objects and aspira- 

(8) Training all leading men and women 

to take part in international life 

and intercourse. 
In order that individual and collective 
citizenship may be developed, the Indian 
people must be equipped with a general 
knowledge of the conditions of success, 
with skill in some profession or trade to 
enable them to earn a living, and with 
sufficient character and discipline to har- 
monize human relations and promote co- 
operative effort. 


The manner and rate of national develop- 
ment will depend upon the opportunities 
for training enjoyed by the people, and the 
extent to which they avail themselves of 
such facilities and submit to discipline. 

Most well-informed persons will agree 
that a stimulus is necessary if new habits 
and practices are to be introduced into the 
country. Some of the suggestions made 
in this book will be distasteful to a section 
of the public on account of the exertion 
and discipline they will demand. Others 
will object to them because they run coun- 
ter to their cherished traditions and pre- 
judices. To others, again, some of the 
changes, such as common dining, suggested 
for the great majority of the population, 
may seem revolutionary. It must be re- 
membered, however, that the interests 
at stake are very great, that world ideals 
are shifting very fast, and that responsible 
government demands a new type of citizen- 

The characteristics to be developed in 
the Indian population should form a sub- 
ject of earnest study by all politicians, 


business men, sociologists and education- 
ists interested in Indian progress. A com- 
mittee or board of leading men should 
be appointed in each province to study 
this important question, and to recommend, 
within a period of one year, definite stan- 
dards and methods for the guidance of 
the people. This committee should refer 
the subjects and correlated questions to 
persons qualified to give advice both within 
and without the province, and representa- 
tive Indians residing outside India. A 
symposium of the opinions elicited may be 
collected and published along with the 
committee's own recommendations. The 
" Indianization " proposals should be 
printed in English and in the vernacular 
of each province, and should be brief and 
have literary finish, so that they may be 
attractive and readily referred to. Each 
province may have its own " Indianiza- 
tion ' scheme, but the recommendations 
of one province, although intended for 
practice in that particular province, should 
be available for study and comparison in 
all the other provinces. 


The tentative " Indianization " pro- 
gramme approved by the committee may 
be recommended for adoption and practice 
from the date of issue. It may be revised 
once every year for the first three years, 
and after that period once every three 
years. A revision at intervals Avill be 
necessary to adapt it to the changing 
conditions of the outer world ; but after 
two or three revisions, it may be assumed 
that the standard will change but slightly, 
only yielding to acknowledged world 

The people should be persuaded, by means 
of effective organization and otherwise, 
to practise the standards prescribed by the 
leaders. An essential characteristic of 
every such organization should be its 
healthy spirit of self-improvement and 




India is very weak in organization. In 
small matters connected with religion, 
caste, social practices, etc., the people 
have preserved some remnants of their 
old organization ; but in other directions, 
particularly in the control of economic 
matters affecting the material well-being 
of the people, such as industry, trade, 
transportation, banking, etc., it has been 
seen that whatever organization exists is 
British. Independent indigenous organi- 
zations of any magnitude have had no 

Regarding the need of organization in 
India, a well-known Bombay journal, the 
Indian Social Reformer, observed in 1912 : — 

" There is nothing in which we in this country need 
to be instructed so much as in organization, whether 



of industry, education, or charity, or even political 
activity. Organization is, broadly speaking, such a 
disposition of the energies and resources of the com- 
munity as to enable them to be rapidly mobilized and 
concentrated on the points where they are most 
wanted or can be most useful. There is plenty of 
almost everything in this country, but one great 
defect is that nothing is where it should be, and 
everything is so dispersed that it is almost impossible 
to bring it when and where it is wanted. Thus in the 
midst of plenty we have often to starve." 

Nothing really large, however, is ever 
done without organization, and the strength 
of organization in any particular country 
depends upon its political condition. In 
democratic countries like England or 
America, most organizations owe their 
origin to popular initiative. Government 
is always anxious to render help to public 
organizations and earn their good opinion, 
because the personnel of the Government 
owe their position to the support of the 
people. In India, where the people's sup- 
port counts for nothing, the work of 
organization for any public purpose beyond 
a certain stage is difficult and oftentimes 
impossible. In countries like Japan, which 
have their own national Government, the 
initiative in this respect chiefly comes from 


Government, which is composed of a few 
far-sighted statesmen chosen from the 
people. On account of the paternal char- 
acter of the administration, the public 
in that country have willingly surrendered 
their interests into the hands of an 

Organization for a country like India is 
the process of arranging or combining the 
constituent parts into a co-ordinated whole, 
and of utilizing the working forces of the 
country to produce the most desired com- 
posite effect. This is true also of local 
organizations. As was observed in a paper 
recently issued by the Washington State 
Board of Commerce : — 

" Community organizations have already been 
recognized as a necessity to any community which 
expects to grow to any great degree, but with the 
changing conditions in this country brought about by 
its rapid development on the one hand and the great 
changes due to the recent War on the other, com- 
munity organizations are now recognized as an essen- 
tial part of every town and city. Such an organiza- 
tion provides a medium through which the citizens of 
a community may pool their best efforts and ideas for 
the welfare of the community, for its expansion as a 
trading or industrial centre, and particularly to bring 
into the community life those things which will pro- 
mote true . . . citizenship." 


Every organization or association, accord- 
ing to the latest practice, must have work- 
ing members and supporters, an adequate 
income, a competent secretary and working 
staff, a good office system, a definite 
programme of work, specific rules for 
committee formation and control, an 
agency for publicity and propaganda and 
intelligent local service. 

When an association or society is 
organized for a public purpose, the execu- 
tive and the members proceed to collect 
the necessary information and data, and 
study and discuss among themselves the 
subject or subjects connected with their 
purpose. The study and discussions lead 
to a common understanding on many 
points and to the clarification of issues 
on doubtful ones. The doubtful points 
are then discussed and decisions and con- 
clusions formed by a majority, large or 
small. The next step commonly taken 
is to act on the decisions. The three 
stages of the work of an organization 
therefore are : (1) study; (2) decision; and 
(3) action. Where an organization is 


effective, all three stages are covered 
very quickly. 

Unanimous decisions are reached only 
in matters which are obvious to everybody. 
Decisions are usually taken according to 
the opinion of the majority and these are, 
or have to be, acquiesced in by the whole 
body, to enable the organization to proceed 
to the next stage in the case. 

The number of subjects which crowd 
upon the attention of any particular organi- 
zation being usually very large, the selec- 
tion of subjects for treatment from the 
large mass of problems and indefinite 
alternatives which distract attention is a 
difficult matter. Skill and forethought 
are necessary to concentrate attention 
upon the essential and the attainable. 

In this work of selection, the people 
would be wise to be guided not only by 
British examples, but by the varied 
experiences of all the progressive coun- 
tries of the world. For many local prob- 
lems in India, ready-made solutions will 
be available in countries like Canada and 
Japan. It is not wise to attempt to 


create a new world for ourselves by shutting 
our eyes to the experience already accumu- 
lated by the mistakes and patient labour 
of the people of other lands. 

In connection with every organization, 
continuity of purpose and policy should 
be held in view. A clear record must be 
kept of the decisions and schemes deter- 
mined upon in every branch of the country's 
activity. From month to month and year 
to year, new decisions will be taken and 
new practices introduced and new codes 
of decisions built up and many of them 
translated into action. The accumulation 
of practical results in this way, of work 
done, decisions accepted, rules and prac- 
tices codified, will constitute an asset 
indicative of the true development and 
progress of the country. 

Propaganda is the means resorted to 
by individuals and public bodies for popu- 
larizing national ideals and programmes ; 
spreading useful information ; promoting 
organization and co-operation for general 
or specific objects ; bringing to notice 
defects and wants and inviting opinions 


and action thereon ; rousing enthusiasm 
for any public reform or scheme, and 
promoting any object of public interest 
whatever, temporary or permanent. Pro- 
paganda will be necessary to educate the 
public or to secure popular support for, or 
stimulate dynamic effort in, any public cause. 

It takes the form of a campaign or 
drive, when it is undertaken in an emer- 
gency to accomplish a specific object or 
purpose within a given time. 

Propaganda was resorted to for correcting 
wrong impressions and spreading reliable 
information during the late War. It might 
be most beneficially utilized in India in 
the coming years for popularizing national 
plans and programmes and training the 
people for full responsible government. 

Among the principal propaganda agen- 
cies are public meetings and periodical 
gatherings. An agency even more important 
is the Press. Newspapers have a three-fold 
object — supplying news, publishing adver- 
tisements and instructing the public with 
opinions and comments on current ques- 
tions. Where they are not worked in a 


purely commercial spirit or in the interests 
of a class, they do much good by ventilating 
public grievances, by rousing public opinion 
and stimulating activity on the part of 
both public associations and the Govern- 

Propaganda is carried on by magazines, 
booklets, pamphlets, leaflets, folders, etc., 
and also by public notices, placards and 
posters, often exhibited on street walls, 
in tramcars and railway carriages. 

In future every public election, whether 
for Imperial, provincial or local councils, 
should be taken advantage of for purposes 
of propaganda. 

Cinemas might be used for spreading 
sound ideas on such subjects as civic life, 
housing, sanitation, industries, etc. Indi- 
genous professional reciters and musicians, 
whose normal vocation is to recite stories 
from ancient epics, may be most effectively 
employed on propagandist work. As is 
done in other parts of the world, the pro- 
fessors of Indian universities and colleges 
should be free to instruct the public. Short 
treatises like the Oxford Tracts will be 


serviceable if written by university pro- 
fessors whose view of current problems 
will be disinterested and whose motives, 
therefore, will be above suspicion. 

The extent to which propaganda is 
resorted to in this way in any public 
cause, and the persistence with which the 
work is continued, will be an indication of 
the earnestness of the people concerned, 
and of their capacity to build up unity 
of thought and action in the county. 

Public associations in India might adopt 
the business methods of the West more 
scrupulously and carry on propaganda in 
a more active spirit than is done at present. 
Some of the existing associations in the 
country are badly managed through in- 
attention to discipline and the omission 
to collect funds to maintain a good secretary 
and effective staff. Meetings are irregular, 
subscriptions are in arrears, one or a few 
persons monopolize the whole responsibility, 
and reports and accounts are not rendered 

Associations get into a rut and growth 
is prevented where the whole responsibility 


is monopolized by one or two persons. 
The originators of associations should ever 
be seeking for others upon whom they can 
throw work and responsibility, thus at 
the same time broadening their own mental 
outlook and the sphere of influence of the 
association. Constant touch should be 
kept with the rank and file of the members 
through widespread local committees, each 
with its own officers. Every member 
should be made to feel that he is a valued 
unit of the association and given some 
office or responsibility directly he reveals 
any special capacity. 

As public opinion will receive recognition 
and consideration from Government in 
future, popular associations will vastly in- 
crease their influence. They will begin to 
feel what a useful part they can play in 
public affairs and realize their responsibil- 
ity for efficient operation. 

In the immediate future the aim of the 
Indian leaders should be to keep the people 
thinking and working ; to rouse in them 
a spirit of development and progress ; 


increase their scale of combination and 
organization ; and until complete respon- 
sible government is conceded, to maintain 
a separate unifying agency or agencies 
independent of Government in order to 
secure continuity of purpose and policy, 
and unity of direction in regard to all 
affairs and activities of a national character. 

For securing unity of direction, it will 
be found an advantage to hold a few reliable 
men responsible for a fixed term at a time 
for the production of results and to change 
the men at regular intervals so as to avoid 
the common faults of Indian organizations, 
viz., slackness of effort or autocracy. 

For the purpose of organization, the 
whole country may be marked out into 
seven spheres or regions, thus : (1) All 
India, (2) province, (3) city, (4) town, 
(5) village, (6) district, (7) sub-district 

For the sake of uniformity, the entire 
activities of the country may be divided 
into three classes, as has been done in 
this book : viz. (1 ) political and administra- 
tive, (2) economic, and (3) social. The 


proposals under the " Indianization ' 
scheme will come under the third head, 
" Social." 

In any area coming under any one of 
these seven spheres or regions, the leading 
inhabitants interested may come together 
and start a central organizing agency to be 
known as the " Development Committee." 

This committee should be non-political 
and non-partisan, and its chief business 
should be to bring into existence all the 
public associations and agencies needed 
in the locality according to the example 
of advanced countries, and to help to 
keep these agencies alert and active and 
absorbed in investigating public questions 
and supplying the deficiencies and wants 
of the region or area concerned. The 
development committee in any region or 
area will be started in the first instance 
by persons who desire to promote the 
interests of the locality, but when the 
region or area is equipped with ah the 
usual organizations, the committee itself 
may be grouped with, and merged in, the 
economic organizations of the area and 


derive its funds and support from them. 
At a later stage uniform regulations may 
be introduced so that the development 
committees, wherever they may be, may 
all work on a common plan of organization 
and so eventually form a national develop- 
ment league : but it is not desirable to 
aim at such uniformity at the very start. 
The reason why the development com- 
mittee should be classed with economic 
organizations is that it has to be operated 
on national lines without party bias. 
Association with either political or social 
reform organizations is undesirable, since 
these latter deal with subjects of a con- 
troversial character and are apt to divide 
instead of uniting the population. 

Among the essential duties of organiza- 
tions in each of the seven spheres or areas 
may be enumerated : the preparation of 
succinct statements of national plans and 
programmes to enable the public to visualize 
the future ; preparation and maintenance 
of lists of urgent and important problems ; 
formation of study circles for investigating 


and elucidating the problems ; frequent 
publication of the opinions of study circles 
and of symposia of views of leading men 
on current topics ; issue of standard circu- 
lars (by recognized leading central organi- 
zations for the guidance of the public) ; 
and bringing into existence institutions 
and agencies needed both for thought and 
action in the area, one by one, according 
to civilized standards. 

In general terms, the organizations in 
each sphere or area should provide for 
(1) the work of initiative in order to bring 
into existence the activities, institutions 
and agencies needed in the area and (2) 
the work of leadership to co-ordinate all 
the activities and ensure central control 
and action. 

The organizations needed for (1) all 
India and (2) each province will be similar 
in character. For all India, there may be 
created a central council consisting of 
seven members and 200 associates for 
developing and unifying the political work 
of the country. This council would work 
in close association with the existing all- 


India political organizations. The central 
council should prepare and maintain lists 
of current political and administrative 
questions and large problems requiring 
continuous attention, and it should distri- 
bute these problems among study circles 
formed from the 200 associates and other 
co-opted workers, drawn from public men, 
statisticians, business men, university pro- 
fessors, etc., throughout the country. 

The central council and associated organi- 
zations and study circles will keep under 
study Imperial, national and international 
problems, and will from time to time 
publish the results of their study and 
recommendations for the information and 
guidance of the public. Such recommenda- 
tions will be discussed at the annual 
sessions of political federations like the 
National Congress and Moslem League, 
and definite lines of action settled upon. 

For the economic work of the whole 
country, a central national council of seven 
persons and 200 associates may be formed 
on similar lines. The council will work 
in association with the industrial conference 


and other economic associations in the 
country on the same lines. 

If sufficient interest is evinced in social 
matters, a similar central council of seven 
leaders and 200 associates may be con- 
stituted also for the social work of all 
India on lines very similar to political and 
economic councils. This council will work 
in co-operation with the all-India social 
conference or congress. 

For the present, at all events, it is not 
desirable that the same leaders should be 
represented on any of these three central 
councils for more than one year at a time, 
save in the case of persons who evince 
exceptional zeal, energy and ability and 
who are willing to devote most of their 
time to the work of the council. 

In the same way every province will 
require three classes of central councils 
with 200 associates each. These pro- 
vincial councils will be responsible for the 
work of the province for a year at a time, 
and will carry on their duties in consul- 
tation with the corresponding conferences 
and other existing provincial organizations. 


For each of the remaining five spheres or 
areas there may be one or more associa- 
tions, societies, clubs, etc., under any or 
all the three heads, political, economic and 
social. The organizations and their activities 
will differ in quality and scale according 
to local circumstances. In a city, for 
instance, there may be a political associa- 
tion, a ratepayers' association, a foreign 
travel association and so on. For economic 
work there may be a Chamber of Commerce, 
an economic conference, a manufacturers' 
association, an agricultural association, etc. 
For social work there may be associations 
for social reform, civic survey, town-plan- 
ning, child welfare, education, physical 
culture, etc. Many of the organizations 
required in each area have already been 
mentioned in different parts of this book 
and need not be repeated here. It is 
sufficient if a correct impression is here con- 
veyed how such associations and agencies fit 
in with a comprehensive organization for 
the whole country. 

Enough has been said to enable the 
residents of any given sphere or area, 


whether it be a province or a city, town 
or village, or a district or sub-district, to 
prepare a working organization and pro- 
grammes on the basis explained. 

The public bodies and associations which 
may thus be brought into existence may 
be independent at first. Any city, town 
or village may start any association or 
society for which there is use in the locality 
and there are the men to run it. No city, 
town or village need wait for another to 
make a beginning. In due course some 
form of co-operation will come to be 
established between the various associations 
engaged in like activities through the 
provincial and central agencies. Such co- 
operation may be kept in view, but need 
not be attempted from the very start. 

Some spheres or areas will require all 
three classes of organizations ; others one 
or a few only ; in others again, existing 
organizations will need supplementing. 
Many towns and villages, through lack of 
men of ability or other resources, will be 
unable to maintain all the organizations 


In each sphere there may be several 
organizations, sometimes rival associations, 
working for the same or similar objects. 
In such cases it is the duty of all these to 
come together and appoint, for short 
intervals at a time, a central unifying 
agency to work upon objects common to 
all of them. In a number of organizations 
of the same class, one of the senior organiza- 
tions may be entrusted with this work, 
say, for a year at a time. The latter will 
prepare statements of wants to be provided 
and defects to be remedied and questions 
to be solved and will constitute study 
groups, and in some cases committees or 
sub-committees, in order to investigate 
problems that are of common interest 
and suggest solutions. 

As public men doing honorary duties 
will not be able to work with the same 
earnestness and energy or to give the 
amount of time necessary for long intervals, 
it is enough for the present to select national 
and provincial central councils for one 
year at a time. The leaders should be 
selected with scrupulous care so that the 


public of all denominations may confide 
in their judgment and accept advice and 
recommendations coming from them. No 
public man, however influential, should be 
on the council of seven members unless he 
is prepared to devote a considerable portion 
of his time to its work during its life of 
twelve months. When he is replaced, he 
will, in the ordinary course, be brought 
on the list of associates and will continue 
to render service on the study circles and 

Under this arrangement, large numbers 
of persons will be engaged in the study of 
current problems and in keeping them- 
selves in touch with what is happening 
in progressive countries. All matters of 
public interest will be watched and studied. 
The services of men of worth and ability 
will be utilized on the study groups, the 
activities needed for progress will be main- 
tained and mass consciousness developed. 
All the material and spiritual powers in 
each area will be mobilized and energetic 
action throughout the whole country stimu- 
lated and sustained. 



India's fundamental problem consists in 
relieving the soil of over-pressure of popula- 
tion by the development of industry, and 
thereby attacking at its foundation the 
appalling poverty which is crushing her 
people. Such advance is possible only if 
illiteracy is banished from the country and 
education of a practical character liberally 
provided, and if the social evils which 
obstruct progress are systematically re- 

An honest endeavour has been made in 
this book to state the causes which are 
responsible for keeping India in such a low 
educational, economic and social condition, 
and to outline the measures of reconstruc- 
tion immediately needed. These may, in 
conclusion, be briefly summarized. 



As regards education, the requisite num- 
ber of primary schools should be started 
and compulsory attendance of all children 
of school age, both boys and girls, should 
be enforced by law. When the new educa- 
tion programme is in full operation, the 
attendance at schools in towns and villages 
should be not less than fifteen per cent, 
of the population. In cities it should be 
more. Persons under eighteen years of 
age who have to earn a living and are 
employed, should be required to attend 
continuation schools for at least six hours 
every week to learn some profession or 

Elementary practical science as applied 
to agriculture and industry, elementary 
book-keeping and rudiments of information 
concerning the economic structure of the 
world and of India in particular, as well as 
instruction in the duties of citizenship, 
should form part of the primary school 
curriculum. The initial outlay on build- 
ings and equipment and the training of 
teachers will be very considerable ; but it 
is an obligation that must be met, even if 


money be borrowed to supplement the 
funds available from current revenues. 

Every province should have its own 
university, and at least one good technical 
and one commercial college for every 
15,000,000 population, giving the highest 
education in their respective subjects. - 
Some twenty universities should be brought 
into existence during the next five years. 
Civics and economics should form obliga- 
tory subjects of study for seventy-five per 
cent, of the students attending the universi- 
ties. Thus it will be possible to train the 
organizers, statesmen and leaders so badly 
needed at present, and for whose services, 
if all goes well, there will be an ever-increas- 
ing demand in future. 

Each province should depute, for train- 
ing in foreign countries, fifty or more 
students at a time — the exact number 
depending upon the population. Nearly 
half of these students should be maintained 
by the provincial Government. In addi- 
tion, the provincial Governments should 
dispatch, at regular intervals, deputations 
of prominent Indians to Canada, Australia 


and Japan, and maintain agencies in those 
countries to supply information and answer 
communications from the people of the 

A study of the political and economic 
framework and machinery of other coun- 
tries will be of the highest value in devising 
schemes for building India's national life, 
and will save the country from many blun- 
ders; for, when ready-made models are 
available, it is not the part of wisdom to 
shut the eyes to them and resort to the 
costly alternative of making new experi- 

India must depend chiefly upon the 
development of large factory industries 
for creating wealth. They will also give a 
lead to medium-scale and minor industries. 
A dozen large industries, including railway 
supplies, machinery, motor-cars, paper, oil, 
porcelain, glass, leather and other articles 
should be started. Iron and textile manu- 
factures should be greatly extended, and 
shipbuilding given special prominence. 

A Board of Industries composed of 
Indian members and aided by British, 


foreign and Indian experts, should be given 
a free hand to direct industrial enterprises 
in every province, under the control of the 
Minister of Industries. Funds to the 
extent of Rs. 10,000,000 to Rs. 30,000,000 
per annum should be at the disposal 
of each provincial Government within 
the next ten years for financing 
industries. The accounts for this expen- 
diture may be subject to the strictest 
audit, but the Board, consisting of men 
enjoying the confidence of the provincial 
Legislative Council, should be free 
to grant all reasonable concessions to 
bona fide local business men. A research 
institute, experimental stations and other 
agencies, institutions and laboratories 
required, should be provided for making 
experiments and training organizers, works 
managers and the labour force of the 
province. Local organizers with directing 
ability should be sought out and given 
financial and other facilities and encouraged 
to start large concerns with the aid of 
experts. A reasonable measure of protec- 
tion should be afforded by levying import 


duties to safeguard the interests of infant 

Five to ten years of such sympathetic 
and systematic encouragement would make 
phenomenal progress possible. 

Further increase of production from 
agriculture will be possible if resort is had 
to intensive cultivation and the use of 
scientific methods of tillage, better farm 
and chemical manures and labour-saving 
tools and machinery. Irrigation, if ex- 
tended, will prove a great source of wealth. 
Approved agricultural methods should be 
taught in experimental stations and in 
schools as well as by propaganda. India's 
salvation in this respect lies in intro- 
ducing new ideas — in gradually training 
the farmer to develop himself from a 
labourer into an intelligent and self-reliant 

Agricultural associations, co-operative 
societies and banks will be needed for 
every town and village group. At the 
commencement, a deputation of half a 
dozen leading farmers, accompanied by one 
or two graduates in agriculture, should be 


sent every six months from each province 
to Europe, America and Japan. 

Government agencies to protect Indian 
traders, and Indian banks to finance their 
trade, should be provided in England and 
in selected foreign countries. Foreign lan- 
guage schools should be established in the 
principal cities, and Indian- owned shipping 
encouraged to facilitate foreign intercourse. 

A review of the position of Indians in 
foreign countries, accompanied by reliable 
statistics, should be prepared and published 
as a necessary preliminary to the develop- 
ment of this phase of national progress. 

A central system of banks like that under 
the Federal Reserve Board of the United 
States should be created and, simultane- 
ously, a system of industrial and agricul- 
tural banks should be brought into exist- 
ence, to afford financial facilities to manu- 
facturers, tradesmen and farmers, both 
large and small, throughout the country. 

Complete statistics should be specially 
collected, giving full particulars of the 
material resources of the country and the 
employment of the people, and every 


facility and encouragement should be given 
to the public to study and discuss problems 
concerning their industries, occupations 
and material wealth, and to form a correct 
idea of the economic status of the country. 

Coming to the more important adminis- 
trative measures and changes needed, it 
must be premised that rapid development 
will be possible only when complete confi- 
dence and understanding is established 
between the Government and the people, 
that is to say, when both the central and 
provincial Governments become constitu- 
tional. The basic principle which should 
be recognized and practised is that the 
Government exists for the people, and that 
its sole business should be to place Indian 
interests first and to work for their advance- 
ment, at the same time helping and co- 
operating with the Empire. 

The Indian provinces should be re- 
arranged and re-grouped so that, if possible, 
no single province may have a population 
of less than 10,000,000 persons. This will 
provide sufficient resources to enable every 
one of them to equip itself with the educa- 


tional and other institutions that have 
been suggested. 

The town population of India, which is 
very inadequate for the demands of its 
trade and industry, should be doubled, in 
order to provide the leaders, middlemen 
and labourers the country's work demands. 

The new form of village government 
suggested might be introduced, so that 
every group of villages containing 500 to 
600 dwellings, or 2,500 to 3,000 inhabitants, 
may have a village Government with its 
own officers and council, and the necessary 
educational and other institutions, agencies 
and associations for carrying on reconstruc- 
tion work. 

A special Reconstruction Ministry should 
be created both in the Central Government 
and in each provincial administration to 
recommend the appointment of commis- 
sions and committees for investigating new 
and important problems, to prepare new 
schemes of development by the study of 
local conditions and foreign models, to 
urge the provision of funds to give effect 
to them, to advise individual departments 


of Government in regard to their spheres 
of reconstruction work, to stimulate a spirit 
of initiative and self-help in the people, and 
to do everything needed to obtain speedy 

A Ministry of Conservation should be 
created, both for the Central Government 
and for each province, to develop the 
natural resources of the country and the 
efficiency of the people. This commission 
should make an inventory of national 
assets in the shape of material wealth, and 
the intelligence and energy of the people, 
and at once begin to mobilize both in order 
to increase production and develop the 
people's working capacity. One of its chief 
functions should be to find employment for 
those people who have not sufficient work, 
and to help men of capacity and worth to 
find occupations for which they are most 
fitted, and which are congenial to them. 
This Ministry, like the Ministry of Recon- 
struction, should be only a planning and 
advisory authority. The executive work 
connected with the new measures should 
be done by the departments concerned, or 


by agencies specially created for the pur- 

A loan, beginning with Rs. 100,000,000, 
and rising gradually to Rs. 300,000,000 per 
annum, should be raised to finance educa- 
tion and industries. Each province should 
raise its own share of this loan and bear 
the responsibility of repayment. The loan 
may be repayable in thirty years, the 
annual charge for paying instalments of 
debt and interest being met from current 
revenues. The charge will be small at 
first, and within the capacity of the province 
to bear. It is safe to assume that, as a 
result of the operation of the new measures, 
at the end of thirty years the country will 
be fully able to bear the charge. Educa- 
tion and industry are great national func- 
tions, and education is, in a sense, a primary 
industry. Both these have been woefully 
neglected for at least a generation past, 
and to make up for time lost and oppor- 
tunities sacrificed, they should be given a 
good start. 

Reference has been made to the direct 


action needed on the part of the people to 
ensure unity of purpose and ideals in their 
public work, and to bring into existence, 
independently of Government, a connected 
organization for the whole country for the 

The ideals to be placed before the Indian 
public should be, politically, to change the 
present conditions of administration, peculiar 
to a dependency, to those of a self-governing 
Dominion like Canada ; economically, to 
develop gradually a new system patterned 
upon Dominion models for production, 
transportation, trade, finance and bank- 
ing ; and socially, to raise the standard of 
living, and promote freer intercourse be- 
tween the various communities within the 
country, as well as between India and 
foreign lands, while retaining all that is best 
and ennobling in the indigenous ideals and 
traditions. Attention should be focussed 
upon making India a nation economically 
strong, socially accomplished, and politically 
a self-governing unit of the British 

The rapid realization of these objects 


depends upon securing the co-operation 
and support of the Government of the 
country, and forming an effective organiza- 
tion to ensure co-operative effort on the 
part of the people. 

On a proper organization like the one 
suggested in the last chapter, or any parallel 
organization, being accepted by the majority 
of the nation, the people should welcome 
what help they can get from Government, 
and in directions where Government does 
not see eye to eye with them or cannot 
render help, they should have specific 
plans of their own as to what they are to 
do both for the country as a whole and in 
individual areas, and labour unceasingly 
for their realization to the best of their 
opportunities. Organization is the key to 
the situation. Nothing big can be done 
without organization. The point now is : — 
Can the nation gather up sufficient energy 
and make a disciplined effort in this manner 
by formulating and carrying into practice 
a comprehensive, yet simple and connected 
scheme of organization such as we have out- 
lined ? It would be a great victory to the 


forces of progress if this could be done. 
A spirited propaganda should be main- 
tained to correct the many wrong ideals in 
which the country abounds, and to plant 
new and healthy ones in their place : new 
ideals calculated to promote the future 
safety and progress of the people. Some 
of the methods, mottoes and precepts 
adopted in Western countries will be found 
to be suggestive. A pamphlet recently 
issued in a Western city, describing 
the city's opportunities, observed : — 

" Here is no thraldom to the past, but a trying of all 
things on their merits and a searching of every pro- 
posal or established institution by the one test, Will 
it make life happier ? " 

In a tramcar of another city was posted 
a public circularjvhich read : — 

' You are doomed to disappointment if you sit back 
and expect the other man to make the city grow : 
there is a real job for every citizen." 

Yet again, in a third city, the motto on a 
journal published on behalf of its business 
and civic interests was :-»- 

" Cities do not grow. They are built." 


The people of every region or area should 
be urged not to lean on others, but to think 
out their problems for themselves : indi- 
vidual problems by self-help, and collective 
ones by co-ordinated effort. They should 
have warning that disuse of their natural 
powers is fatal to their progress. 

When any question of importance arises, 
the local organization should see to it that 
the best minds in the locality qualified to 
deal with the question, study every aspect 
of it, take counsel together, come to sound 
conclusions, instruct and persuade the 
people and take prompt action in a collec- 
tive capacity with the people's co-operation 
and help. It may be a question of increas- 
ing the production of a commodity, popu- 
larizing a new reform, removing an 
anomaly, establishing a new institution, or 
collecting funds for a public purpose. The 
rapidity with which such objects as these 
are accomplished will be an indication of the 
power of organization, of the capacity of the 
local community to exercise power and 
influence in the country by their collective 
effort. Knowledge is power. Capacity for 


co-operative effort is power. The people 
of any area can acquire this power, and 
now and then test their capacity by work- 
ing out specific problems or providing for 
local wants as quickly as possible. One such 
object accomplished will put heart into the 
people and give them courage for further 
effort in the same direction. 

It is not enough to keep up a few activi- 
ties, to carry through a scheme here or a 
reform there. Things must advance all 
round. Every one has his bent and oppor- 
tunities, and if every citizen makes a small 
contribution in money, time or energy, the 
aggregate contribution will be very con- 
siderable, and the country is bound to 

No right-thinking Indian who has cor- 
rectly understood the comparisons insti- 
tuted in an earlier chapter can escape a 
feeling of humiliation at the low inter- 
national standing of his country. The 
question we have to meet is this : — Can the 
Indian be made to realize that his condition 
is capable of improvement — not for a 
season or two, but permanently— in ways 


that may give to his children opportunities 
of making good in the world ? The task, 
it must be admitted, is of appalling diffi- 
culty and magnitude, but unless we believe 
that it is capable of accomplishment, we 
shall be driven to accept the pessimistic 
conclusion of a Western writer that India is 
" the dying East." That conclusion assur- 
edly every Indian will repudiate. A con- 
sciousness should be roused in the Indian 
mind that a better state of things exists 
outside, and a vastly better state of things 
could be brought into existence in India 
itself if the people only willed and worked 
for the same. 


Administration : 

Central Government, 

Changes in, 39 et seq. 

Legislature. See that 

Provincial. See that title. 

Reconstructed Govern- 
ment, Powers and 
Duties, 44 et seq. 

Routine, Simplifying, 73 

Unprogressive in Charac- 
ter, 7 
Afforestation, 199 et seq. 
Agencies for Information, 52 
Agricultural Banks, 145, 186, 

Agricultural Societies, Es- 
tablishing, 180 
Agriculture : 

Crops, Value of, 28, 173 

Cultivated Acreage, 27, 

Developments and Im- 
provements, 4, 5, 178 et 

Education for, 176, 181 et 
seq., 265 

Experimental Depots, 179 

Income per capita of Agri- 
culturists, 173 

Irrigation, 28, 69, 196, 315 

Production Proposals, 315 

Statistics, Use of, 188 et 

Subsidiary Occupations, 
186, 187 
Air Transport, 210 

Alcohol : 

Consumption increasing, 

Revenue from, 108 
Anglo-Vedic College, 254 
Army : 

Esher Committee's Re- 
port, 1920, 100 
Statistics of, 25 

Balfour, A. J., 277 
Banking : 

Agricultural Banks, 145, 

186, 315 
Amalgamations, 120 
British Trade Corporation, 

Credit Banks, 144, 185 
Exchange Banks in India, 

Federal System advocated, 

111, 142 
Industrial Banks, 145, 165 
Japan, 131, 144 
Statistics of, 33 
Trade Banks for India, 316 
United States, 125 
Begging, Abolition of, 238 
Boards of Industries, 120, 

Borden, Sir Robert, 281 
Bridge Construction, de- 
velopment, 212 
British Empire Council, 56 
British Trade Corporation, 

Bryce, Lord, 97 




Budget, Indian, 48, 95 

Canada : 

Foreign Trade, 136 
Governor-General, 48 
Mining Industries, 202 
Production in, 122, 136 
Provincial Finance, 123 
Shipbuilding in, 207 
Shipping Facilities, 205 
Canals, 197, 212 
Capital Investments, 154 
Caste Restrictions, 228, 239, 

244, 247, 253 
Cauvery Power Works, 199 
Central Government, Changes 
under 1919 Act, 39 et 
Chamber of Commerce : 
Indian, suggested, 149 
United States, 125 
Cinema, Propaganda by 

means of, 128, 297 
Cities : 

Administration of, 85 et 

Educational Council, 262 
Libraries and Reading- 
rooms, 87 
Loans for, 105 
Municipal Boards' Expen- 
diture, 76 
Public Service Institu- 
tions, 87 
Surveys, 87 

Town-planning Schemes, 
86, 223 
Civics and Labour Ministry, 

Civics, Education in, 70, 234 
Clubs and Reading-rooms, 

Coinage. See Gold Standard. 
Combines, Industrial, 119 
Conservation Commissions, 

Conservation, Ministry of, 53, 

Co-operative Credits, 145 r 

185, 254 
Corporations for Local 

Development, 214 
Cottage Industries, 158 
Cotton, Duties on, 5 
Council of State, 46, 47 
Credit Banks for India, 144 
Currency : 

Gold Standard, 96, 98, 140 

et seq. 
Rates of Exchange, 95 

Silver Currency, 96 

Dafoe, John W., 281 

Debt— Indian Public Debt, 

Deccan Agriculturists Relief 
Act, 107 

Defence, Statistics of, 24, 25, 

Development Committee, 301 

District Assemblies and 
Boards, 89 et seq. 

Domestic Economy Improve- 
ments, 226 

Economic Council, Organi- 
zation of, 304 
Economics, Teaching of, 258 
Education : 

Agricultural, 176, 181 et 

seq., 265 
Budget, 260 
Civics Courses, 70, 234 
Commercial, 22 
Discipline Systems, 251 
Expenditure upon, 22, 256 

et seq. 
Japan, 109, 259 
Lack of Facilities, 3 
Literacy, Statistics of, 10, 

20, 21, 242, 244 
Loans for, 109 
Local Revenues and 
Grants, 106 



Education (contd.) : 

Moral Teaching in Schools, 

Municipal Libraries and 

Reading-rooms, 87, 227 
Newspapers and Periodi- 
cals, 23 
Provincial Administration, 

Reconstruction Proposals 

summarised, 311 
School Attendance, 263 
Schools, Number of, 21 
Special Schools for Blind, 

etc., 269 
Technical, 22, 152, 168 
University, 266, 267 
Vocational Schools, 264 
Women and Girls. See 

that title. 
Esher Committee Report, 

1920, 100 
Exchange, Rates of, 95 note 
Exports and Imports, 30, 135 

et seq., 155 

Family System, 237 
Federal Government, Advan- 
tages of, 40, 41, 52 
Finance : 

Anomalies in Indian 

Finance, 112 
Banking. See that title. 
Commission on, proposed, 

112, 147 
General System of, 95 et 

Provincial Finance, 59, 

103 et seq. 
Public Debt of India, 110 
Fiscal Autonomy for India, 

6, 55, 111, 147 
Fisheries, 204 
Fiske, John, 75 
Ford Motor Company, 124 
Forests, Development of, 199 

et seq. 
Fuel, Cheap, 198 

Gokhale, Mr., 254 

Gold Standard for India, 96, 
98, 140 et seq. 

Government. See Adminis- 

Government of India Act, 
1919, 11, 39 

Governor-General in Council, 

Great Britain, Reconstruc- 
tion Schemes, 1 18 et seq. 

Gurukula, 254 

Handicrafts, Teaching of, 

High Commissioner in Lon- 
don, 40, 54 
Hospitals and special Insti- 
tutions, 238 
Hotel Organization, 227 
Housing Question : 

Building, Teaching of, 265 
Great Britain, 119, 225 
India, 224, 225 
Hydro -electric Works, 69, 

Illiteracy Statistics, 10, 

20, 21, 242, 244 
Imperial Bank for India, 142 
Imports and Exports, 30, 

130 et seq., 155 
Income in relation to Taxa- 
tion, 107, 229 
Indian Social Reformer, 290 
Indian States, Representa- 
tion in Legislature, 41 
et seq. 
" Indianization " Schemes, 

45, 284, 288, 289, 301 
Industrial Boards, 120, 313 
Industries, 153 et seq. : 

Banks, Industrial, 145, 165 
Development Proposals 

summarised, 313 
Experimental Depots and 

Museums, 167 
Research Institutes, 166 



Industries (contd.): 

Statistics, Collection of, 

Inland Navigation Facilities, 

Insurance, Encouragement 

of, 230 
Intelligence of Indian 

People, 10, 214 
Irrigation, Extension of, 28, 

69, 196, 315 

Japan : 

Agricultural Conditions, 

173, 174, 180 
Banking System, 131, 144 
Capital Investments, 154 
Education in, 109, 259 
Industrial Subsidies, 128, 

Mining Industries, 202, 203 
Production in, 128 
Protective Tariffs, 130 
Reconstruction Schemes, 

Research Work, 130 
Revenue, Division of, 106 
Shipbuilding, Protection 

in, 129, 207 
Standing Committees, 51 
Students in Foreign Coun- 
tries, 133, 282 
Trade, Government Ex- 
ploitation, 132 
Village Groupings for Local 
Administration, 80 
Joint Stock Companies : 
Capital invested in, 154 
Promotion of, 150, 166 

Labour : 

Abundant supply, 163 
Civics and Labour Minis- 
try, 53 
Commission proposed, 234 
Conciliation, 1, 20, 165, 

171, 221, 231, 254 
Exploitation, 231 

Labour (contd.) : 

Industries. See that title. 
Trade Unionism, 254 
Wages and Output, 6, 7 
Whitley Councils, 120 
Land Tax, 103, 107 ft-. 
League of Nations, India's 

Position, 56 
Legislative Council, Electoral 

Qualifications, 58 
Legislature : 

Commissions of Investiga- 
tion, 51 
Reconstituted, 46 et seq. 
Salaries of Members, 49 
Sessions, Length of, 50 
Standing Committees, 50 
Loans : 

Agricultural, 178 
Education and Industries, 

170, 320 
Municipal, 105 
Local Government, 57 et 

seq., 67, 77 
Local Revenue. See Provin- 
cial Administration. 
Local Self-Government, 

Definition of, 74 
Local Taxation in Rural 
Areas, 77 

Macatjlay, Lord, 101 
Marriage Customs, 240, 244 
Mining Industries, 201 
Ministers' Salaries, 61 
Ministries, Increase neces- 
sary, 52, 61 
Montagu, Rt. Hon. Edwin, 11 
Montagu - Chelmsford Re- 
port, 76, 79 
Montessori System of 

Education, 250 
Moral Teaching, 250 
Motor Transport, 209 
Municipal Act of Ontario, 67 
Municipal Board's Expendi- 
ture, 76 
Mysore, Works in, 69, 199 



Nation -Building, 273 et 

Nationalisation Ideas in 

Great Britain, 119 
Navy, Need for, 24 
Newspapers and Periodicals : 
Number of, 23 
Propaganda Value, 296 

Officials in India, 72 
Organization : 

Councils, Political and 
Economic, 303, 304 

Plans of, 290 et seq. 

Spheres of, 300 et seq. 
Osborne, W. A., 282 

Panchayets, Suggested re- 
vival of, 79 
"Pariahs," 8, 239, 247 
Peace Conference, India's 

position at, 56 
Peasant, Backward condi- 
tion of, 175 
Pessimism of Indians, 237, 

Pestalozzi System of Educa- 
tion, 251 
Philippines, Education in, 

Pioneering of Industries, 161 

et seq. 
Political Councils, 303 
Population : 
Growth of, 9 
Provinces, 64, 65 
Urban, Expansion of, 4, 

65, 66 
Vital Statistics, 17 et seq. 
Post and Telegraph Services, 

26, 27 
Postal Savings Banks De- 
posits, 34 
Press : 

Control in India, 253 
Influence of, 296 
Number of Newspapers 
and Periodicals, 23 

" Princes' Chamber," 42 
Prisoners training in Self- 

Government, 251 
Production : 
Increasing, 169 
Statistics, 29 
Propaganda, Value of, 13, 

295 et seq., 323 
Protective Tariffs, 6 
Canada, 122 

Indian Industry, 161, 162 
Japan, 129, 130 
Provincial Administration, 
57 et seq. 
Education, 261 
Finance Provisions, 59, 

103 et seq. 
Local Government Boards, 

Population Units, 65 
Public Works Develop- 
ment, 68 et seq. 
Re -grouping of Provinces, 

Sub-provinces, constitu- 
ting, 64 
Trade, Inter-provincial, 
Public Works, Development 
Schemes, 216 

Railways : 

Administration and Rev- 
enues, 104, 105 
Development, 134 
General Account of, 207 

et seq. 
Statistics of, 31 
Travelling Facilities, 228 
Raja Ram Mohan Roy, 243 
Ranade, Mr. Justice, 107 
Reading-rooms and 

Libraries, 227, 262 
Reconstruction Ministry, 

Creation of, 52, 318 
Religion, 20, 249 
Revenue, 32, 101 et seq. 
Alcohol Excise, 108 



Revenue (contd.) : 

Comparative Statistics, 32, 

Division of, 106 
Rivers, 212 
Roads : 

Maintenance and exten- 
sion, 210, 211 
Travelling Facilities, 228 
Rockefeller, John D., 125 
Rogers, Henry Wade, 75 
Rupees and Gold Standard, 

140 et seq. 
Rural Boards, Expenditure 
of, 76 

Sanitation : 

Improvements in, 225 
Villages, 78 

Savings Habit, Encouraging, 

Schools. See Education. 

Secretary of State : 

Alteration in Authority, 40 
Banker of India, 27 
Powers and Duties of, 55 

Self-Government, 74, 321 

Sericulture, 184, 187 

Servants of India Society, 

Shipbuilding : 

Encouragement in India, 

Japan, 207 
United States, 127, 207 

Shipping : 

British Control, 138, 146 
Coastal Shipping, 31 
Indian-owned Vessels, 206 
Tonnage entered and 
cleared, 31, 205 

Shirras, G. Findlay, 34 note 

Silver Currency, 96 

Social Reforms in various 
Countries, 236 

Social Work, Organization of, 
221 et seq., 306 

Standing Committees, 55 

Students in Foreign Coun- 
tries, 133, 268, 282, 312 

Taft, President, 276 
Tagore School, 254 
Taluks, 79, 91 
Tariffs. See Protective 

Tata Hydro - Electric 

Scheme, 199 
Tata Industrial Bank, 145 
Taxation : 

Cardinal Principle of, 104 
Cotton Duties, 6 
Income in relation to, 107 
Land Tax, 103, 107 
Local Taxation in Rural 
Areas, 77 
Technical Education, 168, 

Technical Improvements, 

Stimulating, 14 
Telegraph and Telephone 

Services, 26, 27, 213 
Towns : 

Administration of, 88 
Educational Council, 262 
Loans for, 105 
Population, Expansion 

needs, 4, 66, 221, 318 
Town-Planning Schemes, 
86, 223 
Trade : 

Banks, 316 

Commerce and Industry 

Board, 148, 149 
Consuls, 147 
Financing by Great Britain, 

Foreign Trade of India, 

135 et seq. 
Imports and Exports, 30, 

130 et seq., 155 
Internal Trade of India, 

Production Statistics, 29 
Utilization of Man-Power 
and Material, 14 et seq. 



Trade Unionism, 254 
Traffic Resources, 205 et seq. 
Travelling Facilities : 

Foreign Travel, Prohibi- 
tion of, 242 

Improvements, 228 

Unemployment Insurance, 

United Kingdom Capital In- 
vestments, 154 
United States : 

Agricultural Bureaux, 192 
Capital Investments, 154 
Industries and Production, 

Mining Industries, 202 
Motor Transport, 209 
Trade Boards, 125 
University Education, 266, 

Urban Population, Expansion 
of, 4, 66, 221, 318 

Village Local Govern- 
ment, 78 et seq. 

Grouping for, 105, 195, 318 

Japan, 80 

Schools in Villages, 263 
Vital Statistics, 17 et seq. 
Volunteer Workers, 254 

Wages and Output, 6, 7 


Effect on Trade, Table, 126 
Indian Finance during, 98 

Water- Power Resources, 69, 

Waterways, Inland, 212 

Wealth Averages, 6 

Widows, Position of, 241, 246 

Women, Restricted status of, 
8, 9, 246 

Women and Girls' Educa- 
tion, 8, 22, 226, 242, 257 

Yokohama Specie Bank, 144 

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Demy 8vo. Cloth. 2 Volumes. In the Press. 

Principles of Comparative 

Lectures delivered at the University of 
the Panjab and the University of Calcutta 

By Radhakamal Mukerjee, M.A., Ph.D., Premchand 
Roychand Scholar ; Sometime Professor of Economics, 
Krishnath College, Berhampore ; Special Lecturer in Indian 
Economics, University of the Panjab, 1917 ; Lecturer in 
Economics, Calcutta University ; Author of " The Founda- 
tions of Indian Economics." 



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Laws and Phenomena. III. — Social Dynamics and Econo- 
mics. IV. — Evolutionary Economics. V. — Co-operation aa 
Evolving New Economic Concepts. 

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Chapter I. — Social Psychology and Economics (Theoretical 
and Applied). II. — Social Values : their Place in Economics. 
III. — The Regional Factor in Economics. 

C. — The Foundations of Regional Economics. 

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tary Forms, (B) Transition Phenomena, (C) Degeneration. 
IV. — -Conflict of Economic Types and Regions. V. — Prin- 
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Principles of Comparative 

Volume 2t. 

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Chapter I. — The Permanent Elements in the Village Com- 
munity. II. — Agriculture on a Communal Basis. III. — 
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Credit. VI. — Progress of Communalism. 

C. — City Development and Communalism. 

Chapter I. — Industry in Relation to the Distribution of 
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Public Health. III. — Economic Conditions in Relation to 
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